The Apple versus Facebook battle escalated quickly this week! The two companies had been on opposite sides for some time when it came to ad-tracking, but Facebook dramatically upped the ante when it ran full-page newspaper ads attacking Apple – with more reportedly planned.
It’s a battle Facebook almost certainly cannot win. The risk to Apple, however, is that it is very possible both companies could lose …
The Apple versus Facebook battle in a nutshell
We’ve previously explained what the dispute is about.
iOS will next year force apps to ask for permission if they want to use ad-tracking. It’s expected that most users will refuse, which will mean apps won’t be able to easily offer personalized ads. Ads reflecting user interests earn more money for app developers than generic ads.
The change will significantly impact Facebook, as the ads it carries in the app will be worth less. The social network claims, however, that it doesn’t have its own interests in mind: it is instead standing up for small businesses.
Both companies are misleading people
Apple, for its part, says it isn’t trying to prevent ad-tracking, but merely wants to offer users a choice. This is true, but somewhat misleading: the wording the company is using makes ad-tracking sound much scarier than it is.
Allow “Facebook” to track your activity across other companies’ apps and websites?
That wording makes it sound like Facebook is spying on them, so the vast majority of people are going to refuse permission. While Apple is in theory just offering a choice, the reality is that it is effectively leading people to choose no.
Apple’s wording is misleading because the tracking system in question – IDFA, or IDentifier For Advertisers – was designed by Apple, and it very specifically prevents the tracking of identifiable individuals. All it actually does is record whether a particular device has displayed a particular ad, and allows an advertiser to display its ads on devices which have visited particular types of website. Visit a website about skiing, for example, and you’re more likely to see an ad for ski wear than for garden trowels. At no point does Facebook or anyone else have any idea who you are because Apple ensured that in the way it designed IDFA.
But while Apple is being somewhat misleading, that’s nothing compared to Facebook. The social network is making the frankly ridiculous claim that it is acting to protect small businesses, not look after its own interests.
We’re standing up to Apple for small businesses everywhere […] While limiting how personalized ads can be used does impact larger companies like us, these changes will be devastating to small businesses, adding to the many challenges they face right now. Small businesses deserve to be heard. We hear your concerns, and we stand with you.
There is not a single person on the planet who has fallen for that nonsense.
Facebook will lose this battle
There is also not the slightest chance that Facebook will win. It won’t persuade Apple to change its mind, nor will it persuade regulators to block Apple’s planned change.
It’s also a completely counter-productive move by Facebook. Yes, the reality is relatively innocuous, as outlined above, but that is not how most people are going to see this. The person in the street is going to see this as Apple standing for their privacy, and Facebook trying to get their data.
Indeed, one direct result of this battle has been to draw public attention to the app privacy information Apple now requires developers to display on the App Store – Facebook’s disclosed tracking data simply scrolls and scrolls. Forget IDFA: Facebook has to own up to everything it uses for any aspect of its service, and that’s a huge amount of personal data. Without this battle, hardly anyone would have read it (nobody reads privacy policies); but now lots of people are doing so.
This is a complete own-goal by Facebook, increasing public antipathy toward the company.
But Apple may lose too
Apple can lose out in two ways.
First, the popularity of Apple’s hardware is in large part down to the apps which run on it. Many, many apps are ad-funded, and by encouraging customers to refuse permission for ad-tracking, developers will earn significantly less money from their apps. Some free apps that are viable today won’t remain so.
Apple may now consider itself too big to care. Its customers are incredibly loyal, and for most people, only the big apps matter.
But there is a second way the iPhone-maker can lose. Facebook is, right now, a loose cannon. It is clearly extremely pissed, and it is hitting out in any way it can. A second planned ad is pure fear-mongering – suggesting that reduced ad revenue will force developers to charge subscription fees – but it is likely to work. Some will believe it.
More than this, it will draw the attention of regulators. Apple already faces huge antitrust pressures around the world, and having one of the world’s largest companies coming after you with attack ads is going to add tremendously to that pressure. Some scared consumers are also likely to complain to their political representatives, again increasing the likelihood that Apple will face regulation.
The two companies should talk
It’s in the interest of both companies to resolve this, and it honestly wouldn’t take much to do so.
Apple can modify its permission dialog to something more reflective of the reality. This, for example:
Allow anonymous ad-tracking? Advertisers won’t know who you are, but you’ll see ads based on the websites you visit. This helps app developers and websites as they get paid more for personalized ads. You can make this choice for each app you use, allowing some and refusing others.
That is an accurate description of IDFA and means consumers see the whole picture. They are much more likely to respond thoughtfully, rather than automatically refusing permission.
Would you like to see this approach? Please share your thoughts in the comments.
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