Pixel Envy

Written by Nick Heer.

App Tracking Transparency Advantages Apple’s Ad Network

Eric Seufert:

Apple uses data about in-app purchases that users have made and apps that they have downloaded to personalize ads. This data was previously available to other advertising platforms through the event streams they ingested from apps and websites via SDKs and pixels, but ATT will sever that access. Apple is using the particular definition of “tracking” — and a very generous definition of all transactions facilitated through the App Store as being first-party data — to capture advertising market share.

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As I outline in my Content Fortresses thesis, when only first-party data is permissible for use in advertising targeting, then the largest consumer tech companies will simply grow their first-party datasets. Apple is claiming that the entirety of the App Store exists in its first-party data environment and so every interaction that takes place in any app is fodder for its ads optimization algorithm.

From a consumer’s perspective, there is some logic to the argument Apple is making and which is echoed by the W3C. Using only first-party data to target advertising fits with the existing business relationship a user has with a company. If I have tracking enabled, I fully expect Apple to use my App Store purchase history to show me ads for other apps. If I use one of Facebook’s apps, I will not be surprised if it uses the accounts I follow and things I search to inform the advertising it shows me. But if I launch some other third-party app, I only know that some undisclosed SDK will inform the ads Facebook and Google show me elsewhere because I am in this industry and I write this website. It’s the same thing for ad tracking across the web.

But if platform owners get to claim that the activity that occurs in their own apps and third-party apps that are required to use a specific payment mechanism, that gives them a diabolical first-party advantage. No matter whether this is legal, it sure looks bad for Apple to quickly seize upon its platform owner position with new ad slots. Perhaps my interpretation of this is coloured by how much I think advertising has generally crapped up the App Store, but this seems like a brazen taunt directed at the many antitrust investigations Apple is currently facing.

Seufert:

And Facebook is left with little recourse. The company attempted to sway consumer sentiment to its side through an enormously wide-reaching PR campaign, but its efforts there were hobbled by the narrow messaging that was available to it. Facebook couldn’t explain in detail why ATT will harm consumers because, in doing so, it would need to reveal just how it personalizes ads — through observing conversions on third-party websites and apps. So Facebook was restricted to a fairly weak PR strategy, which was to highlight that small businesses would be harmed by ATT. This is true, of course, but it doesn’t invigorate a deep well of compassion from consumers. Does anyone want to acknowledge that their local florist or butcher is personalizing ads to them? Meanwhile, Apple simply had to mention “privacy” whenever objections to ATT were raised and mainstream media outlets rushed to defend it.

The fact that companies — businesses small and large — use creepy ad targeting to more precisely find potential customers does not make it any less creepy or any more permissible. I continue to believe that this anti-privacy economy ought to be regulated to the teeth. Not only would it assert that privacy is a right we should all have no matter the medium, it would also mean companies like Apple would be unable to use privacy as a unique pretext for decisions like these.