It's time to say farewell, advertising cookie. After years of debate, Apple Inc. and Google are making separate moves to effectively kill the software marketers use to track your online activity and tailor ads specifically for you.
Starting on Monday, Apple will require apps running on its devices to get consumer permission before tracking their activity on other apps and websites. The company has already outlawed the use of unauthorized third-party cookies on its Safari web browser. Now, that prohibition is coming to apps.
Google, meanwhile, is inventing a cookie alternative, rather than crushing it. Google’s feature will let marketers continue to target desired buckets of consumers, just no longer using an individual’s web history. In theory, this will make it more difficult to mesh ad-tracking with information collected from data brokers and other providers, which has let marketers target consumers based on age, race and gender.
Both companies are justifying their moves as improving privacy. Google, though, has pitched its effort as a balancing act between privacy and the survival of web publishing, which relies on ads.
Ever use an app and see a screen pop up asking to use your phone’s microphone or camera? Apple’s change will work like that. Apps that want to track for advertising on iPhones and iPads will have to prompt users to opt in. Apple calls this App Tracking Transparency, or ATT.
One game developer called Apple’s new rule an "atomic bomb." Apple says consumers should decide how their data are used. The company also thinks "the industry will adapt" to its ATT standard, Craig Federighi, Apple’s software chief, told European regulators.
Mobile advertising inside apps is a sizable business, and Apple’s move has the potential to gut the sector. Bank of America research estimated Apple’s change could shave as much as 3% off Facebook’s revenue. For more, read the full Bloomberg report now on The Washington Post.
In other news on this front, it's being reported by the Financial Times that "A group of Germany’s largest media, tech and advertising companies have accused Apple of antitrust abuse as it introduces changes to the privacy settings of iPhones that they say will harm the ads market.
Nine industry associations, representing companies including Facebook and Axel Springer, the owner of Bild, Die Welt and Insider, filed the complaint on Monday with Germany’s competition regulator.
The German complaint predicted a 60 per cent fall in advertising revenues for app developers, as the changes make it harder for third parties to gather the data they need to place ads.
Thomas Hoppner, at law firm Hausfeld, which is representing the complainants, said more apps will have to switch to charging consumers instead of the current advertising-based business model.
He added: “Consumers will be harmed by higher transaction costs. If the relevance of ads decreases, consumers will have to spend more time searching to find offerings that are relevant to them.” For more, read the full Financial Times report.
It's clear that Apple's controversial move will be fought out in the press and in the courts for the foreseeable future.