Home

03.17.21

iOS 14, Cookies, and Consumer Privacy Issues: What To Know, What to Expect

by Victoria Garcia Galarza and Josh Verseput

Just as Google is announcing it will stop using third-party cookies for tracking, Apple also introduced a set of new privacy policies with the release of iOS 14 that will impact ad tracking, location data, and targeting. This means users will need to opt-in to receive targeted digital advertising. This policy will disrupt digital advertising as we know it.

Here at Material, we’re helping clients navigate what’s going on, not only in their ecosystem, when it comes to their dot-coms and their apps, but also from a media perspective: Why is it happening now? How will it impact performance and the way we look at ROI and ROAS? How will it affect your brand’s current status and its longevity? And how can you make sense of all these changes? 

Apple’s iOS 14 update will impact tracking capabilities, especially from an app perspective. This is Apple, Google, and Facebook’s way of capturing their stakehold on their black box. Apple, in particular, is attempting to push Facebook and Google out of their ecosystem, by explicitly asking users to opt into permissions to give their data away — which we know is how Google and Facebook have been operationally boosting their businesses. As a result of those users who will inevitably opt-out, overall ad performance will suffer.

It’s all cleverly packaged: These changes are being presented under the guise of privacy and consumer protection. However, they affect far more than privacy, with wide-ranging implications on institutional ways of measuring campaign performance, understanding attribution, and quantifying the ways that your media plans are actually driving ROI. In the grand scheme of things, it’s companies like Google and Apple protecting their data assets through these changes. What they’re really doing (and not stating explicitly) is taking advantage of consumers’ concerns about privacy as an opportunity to increase profits, since Google and Apple still depend on collecting and monetizing user data. This presents some pretty big challenges for our clients: How do we rethink attribution modeling? How can we rethink analytics? How can we rethink media optimization? 

We’re seeing a shift away from things like multi-touch attribution, swinging the pendulum back to media mix modeling, because we need to use the data we already have to start making decisions about the future. The one thing we do know is that, at the moment, decision-making and optimization is going to have a far different look and feel than it has in years past.

The Winners and Losers

Ideally, consumers would be the winners in all of this, their data better protected, only shared voluntarily, and they know where that data is going. As a consumer, while I know I’m sharing my location data when Uber picks me up, I don’t necessarily know other apps are tracking my location data in the background. The hope is that these updates will help consumers feel like their ad experience is a good one — not an invasive one, now that they have voluntarily shared this data. We’ve long struggled with media placements feeling intrusive, and the iOS update presents an opportunity for “media people” like us to tailor the ad experience once people have opted in. 

On the other hand, we could argue that consumers might not actually be the beneficiaries of these updates. Minimizing the data known about an individual necessitates less relevant ad experiences, and as a result, those ads themselves are going to be a lot less resonant. As a consumer, my ability to connect with an ad, and by extension, a brand, diminishes under this revised structure. It means I am less likely to feel inspired by that brand experience, and the ads are hamstrung in their ability to speak to what matters to me, what motivates me, and meet my needs. This need not mark the end of great advertising, though. Direct interactions with brands are likely to become more intimate and personalized based on the first-party data they own. As firms lessen their emphasis on performance and shift their focus to building campaigns, we’ll see creative talent leveraged to tell stories rather than create clickbait.  

So while we don’t know who will be the biggest winner, it looks likely the biggest losers will be the small companies: Thanks to this update, all of the data is being consolidated in the Googles, Microsofts, Facebooks, and Apples of the world. Each of them is trying to carve out their niche in this market. Small companies and startups, however — the innovation centers — will find it increasingly difficult to compete with the behemoths without first-party data, as power consolidates at the top. There’s now less room for competition, which is ultimately going to drive less innovation and consolidate more of the revenue, with more media reliance shared amongst those top few companies.

Victoria Garcia Galarza
Josh Verseput