Google Plan to Lock Down User Data Draws Advertisers Fire
The Battle for Digital Privacy Is Reshaping the Internet
As Apple and Google enact privacy changes, businesses are grappling with the fallout, Madison Avenue is fighting back and Facebook has cried foul.
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SAN FRANCISCO — Apple tree introduced a pop-upwardly window for iPhones in April that asks people for their permission to exist tracked by different apps.
Google recently outlined plans to disable a tracking technology in its Chrome web browser.
And Facebook said concluding month that hundreds of its engineers were working on a new method of showing ads without relying on people's personal data.
The developments may seem like technical tinkering, but they were connected to something bigger: an intensifying battle over the time to come of the internet. The struggle has entangled tech titans, upended Madison Avenue and disrupted modest businesses. And information technology heralds a profound shift in how people'south personal information may be used online, with sweeping implications for the ways that businesses brand money digitally.
At the center of the tussle is what has been the net'south lifeblood: advertizing.
More 20 years ago, the cyberspace drove an upheaval in the ad industry. It eviscerated newspapers and magazines that had relied on selling classified and print ads, and threatened to degrade goggle box advertizing equally the prime number fashion for marketers to reach large audiences.
Instead, brands splashed their ads beyond websites, with their promotions oft tailored to people's specific interests. Those digital ads powered the growth of Facebook, Google and Twitter, which offered their search and social networking services to people without accuse. Only in exchange, people were tracked from site to site by technologies such every bit "cookies," and their personal data was used to target them with relevant marketing.
Now that system, which ballooned into a $350 billion digital ad manufacture, is being dismantled. Driven by online privacy fears, Apple and Google have started revamping the rules around online information collection. Apple tree, citing the mantra of privacy, has rolled out tools that block marketers from tracking people. Google, which depends on digital ads, is trying to have it both ways past reinventing the organisation so information technology can continue aiming ads at people without exploiting access to their personal data.
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If personal information is no longer the currency that people give for online content and services, something else must take its place. Media publishers, app makers and east-commerce shops are now exploring different paths to surviving a privacy-conscious cyberspace, in some cases overturning their business concern models. Many are choosing to make people pay for what they get online by levying subscription fees and other charges instead of using their personal data.
Jeff Green, the chief executive of the Trade Desk, an ad-technology company in Ventura, Calif., that works with major advertizement agencies, said the behind-the-scenes fight was fundamental to the nature of the web.
"The cyberspace is answering a question that it'south been wrestling with for decades, which is: How is the net going to pay for itself?" he said.
The fallout may injure brands that relied on targeted ads to get people to buy their goods. It may also initially hurt tech giants similar Facebook — but not for long. Instead, businesses that tin can no longer track people but yet demand to advertise are likely to spend more with the largest tech platforms, which still have the nigh data on consumers.
David Cohen, master executive of the Interactive Advertising Bureau, a trade group, said the changes would keep to "bulldoze coin and attention to Google, Facebook, Twitter."
The shifts are complicated by Google's and Apple's opposing views on how much ad tracking should be dialed back. Apple wants its customers, who pay a premium for its iPhones, to have the right to block tracking entirely. Simply Google executives take suggested that Apple has turned privacy into a privilege for those who tin afford its products.
For many people, that means the net may start looking different depending on the products they employ. On Apple gadgets, ads may be only somewhat relevant to a person'southward interests, compared with highly targeted promotions inside Google's spider web. Website creators may eventually cull sides, then some sites that work well in Google'southward browser might non even load in Apple'southward browser, said Brendan Eich, a founder of Brave, the private web browser.
"It will be a tale of two internets," he said.
Businesses that do not keep up with the changes risk getting run over. Increasingly, media publishers and even apps that show the conditions are charging subscription fees, in the same way that Netflix levies a monthly fee for video streaming. Some east-commerce sites are because raising product prices to go on their revenues up.
Consider Vii Sisters Scones, a mail-order pastry shop in Johns Creek, Ga., which relies on Facebook ads to promote its items. Nate Martin, who leads the baker'due south digital marketing, said that after Apple blocked some ad tracking, its digital marketing campaigns on Facebook became less constructive. Because Facebook could no longer get as much data on which customers similar baked goods, it was harder for the store to observe interested buyers online.
"Everything came to a screeching halt," Mr. Martin said. In June, the bakery'due south revenue dropped to $16,000 from $40,000 in May.
Sales have since remained apartment, he said. To commencement the declines, Seven Sisters Scones has discussed increasing prices on sampler boxes to $36 from $29.
Apple tree declined to annotate, simply its executives have said advertisers will adapt. Google said it was working on an approach that would protect people's data but besides allow advertisers go along targeting users with ads.
Since the 1990s, much of the web has been rooted in digital advertisement. In that decade, a slice of lawmaking planted in spider web browsers — the "cookie" — began tracking people's browsing activities from site to site. Marketers used the information to aim ads at individuals, so someone interested in makeup or bicycles saw ads about those topics and products.
After the iPhone and Android app stores were introduced in 2008, advertisers besides collected data about what people did inside apps past planting invisible trackers. That information was linked with cookie information and shared with data brokers for even more specific advertizing targeting.
The upshot was a vast advertisement ecosystem that underpinned gratuitous websites and online services. Sites and apps like BuzzFeed and TikTok flourished using this model. Fifty-fifty e-commerce sites rely partly on advertizement to expand their businesses.
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But distrust of these practices began building. In 2018, Facebook became embroiled in the Cambridge Analytica scandal, where people's Facebook data was improperly harvested without their consent. That same year, European regulators enacted the General Data Protection Regulation, laws to safeguard people's information. In 2019, Google and Facebook agreed to pay record fines to the Federal Trade Commission to settle allegations of privacy violations.
In Silicon Valley, Apple reconsidered its advertisement approach. In 2017, Craig Federighi, Apple's head of software engineering science, announced that the Safari web browser would block cookies from following people from site to site.
"It kind of feels like you're being tracked, and that'south because you are," Mr. Federighi said. "No longer."
Last twelvemonth, Apple announced the popular-up window in iPhone apps that asks people if they want to be followed for marketing purposes. If the user says no, the app must end monitoring and sharing information with third parties.
That prompted an outcry from Facebook, which was one of the apps affected. In December, the social network took out full-folio newspaper ads declaring that it was "standing upward to Apple" on behalf of small businesses that would go hurt once their ads could no longer find specific audiences.
"The situation is going to be challenging for them to navigate," Mark Zuckerberg, Facebook's chief executive, said.
Facebook is now developing ways to target people with ads using insights gathered on their devices, without allowing personal data to be shared with third parties. If people who click on ads for deodorant as well buy sneakers, Facebook tin can share that pattern with advertisers so they tin testify sneaker ads to that group. That would exist less intrusive than sharing personal information like email addresses with advertisers.
"We support giving people more command over how their information is used, but Apple's far-reaching changes occurred without input from the industry and those who are virtually impacted," a Facebook spokesman said.
Since Apple released the popular-up window, more than 80 percent of iPhone users have opted out of tracking worldwide, according to advertisement tech firms. Last month, Peter Farago, an executive at Flurry, a mobile analytics firm owned by Verizon Media, published a post on LinkedIn calling the "fourth dimension of death" for ad tracking on iPhones.
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At Google, Sundar Pichai, the master executive, and his lieutenants began discussing in 2019 how to provide more privacy without killing the visitor's $135 billion online ad business organization. In studies, Google researchers plant that the cookie eroded people'south trust. Google said its Chrome and advertising teams ended that the Chrome spider web browser should end supporting cookies.
Simply Google besides said it would not disable cookies until it had a different style for marketers to go on serving people targeted ads. In March, the company tried a method that uses its information troves to identify people into groups based on their interests, so marketers can aim ads at those cohorts rather than at individuals. The approach is known as Federated Learning of Cohorts, or FLOC.
Plans remain in flux. Google volition not block trackers in Chrome until 2023.
Fifty-fifty so, advertisers said they were alarmed.
In an article this yr, Sheri Bachstein, the head of IBM Watson Advertising, warned that the privacy shifts meant that relying solely on advertising for revenue was at risk. Businesses must arrange, she said, including by charging subscription fees and using artificial intelligence to help serve ads.
"The big tech companies have put a clock on us," she said in an interview.
Kate Conger contributed reporting.
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Source: https://www.nytimes.com/2021/09/16/technology/digital-privacy.html
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