They say the future is cookieless — and we’re not talking about chocolate chip. As consumers start to demand more privacy over their personal information and tracking data, more and more companies are working to eliminate cookies that track users — sometimes without them even knowing — in an attempt to gain back consumer trust.
Two of the latest big tech players to announce such changes include Apple and Google.
In 2021, Apple announced privacy changes that sent Facebook’s stock plummeting. After recent news that Google plans to deploy similar changes, many are wondering whether Google’s privacy change will add fuel to the flames burning Facebook?
The $10 Billion Apple Policy That Shook Facebook
In 2021, Apple rolled out a privacy update that immediately sparked uproar from Meta (formerly known as Facebook) and Snap.
The update to iOS prevents advertisers from tracking iPhone and iPad users without their consent.
Facebook asserted this change would harm small businesses by impeding their ability to find local customers through targeted ads in a cost-effective and straightforward way. Facebook expects the changes to decrease its sales in 2022 by around $10 billion.
The news of Apple’s privacy changes also wiped $232 billion from the company’s market cap in one day, pushing the value below $600 billion. For comparison, Facebook was worth more than $1 trillion in June of 2021.
95% Of Users Opt-out of Ad Tracking
Following Apple’s move, Google announced in mid-February that it would adopt new privacy restrictions as well by cutting tracking across apps on all Android devices.
“Today, we’re announcing a multi-year initiative to build the Privacy Sandbox on Android, with the goal of introducing new, more private advertising solutions,” said Anthony Chavez, VP of Product Management, Android Security & Privacy.
“The Privacy Sandbox on Android builds on our existing efforts on the web, providing a clear path forward to improve user privacy without putting access to free content and services at risk.”
As part of the changes, Google announced plans to phase out its advertising ID feature, a unique string of digits that Google pioneered to track Android users with the goal of helping advertisers know whether someone has clicked on an ad or purchased a product while also keeping tabs on their interests and activities.
Google plans to eliminate advertising identifiers like this for all Android users on all websites and apps, including Google.
The news should not be totally unexpected because just last year, Google announced it would move away from Advertising ID on mobile as well as restrict the use of cookies on the Google Chrome web browser.
Chavez said they’re also exploring technologies aimed at reducing covert data collection, including safer ways for apps to integrate with advertising software development kits (SDK).
The changes won’t be fully implemented for at least two years, according to Google officials. But, when they do, they’re bound to have some degree of impact on ad-based businesses — like Facebook’s —bottom lines.
When Apple announced its changes in 2021, early reports showed that more than 95% of iPhone users were opting out of ad tracking.
These changes also have the potential to affect big tech companies that rely on tracking users, like Facebook.
Android is OS for 85% of Mobile Phones
As two of the world’s largest smartphone software providers, Google and Apple both hold significant power over what mobile apps can and cannot do on billions of devices worldwide. Changes to bolster privacy or give users more control over their data — which is a growing demand — come at a cost for the companies that collect that data to sell personalized ads with.
Android is the default operating system for 85% of mobile phones across the globe. So, you would think these changes would hurt Facebook even more than Apple’s. But, there are some key differences between Apple and Google that will likely make the impact sting a bit less.
“Google is an advertising company, and any push towards real privacy will hurt their revenue, which they wouldn’t do,” said Dmitry Gerasimenko, CEO and founder of the alternative search engine Ahrefs.
Privacy advocates believe Google’s changes won’t be quite as restrictive as Apple’s App Tracking Transparency.
Will Google’s Privacy Change Hurt Facebook Stock?
“Google’s new policy will surely impact Facebook, but it will be helpful for both users and Facebook. Unlike Apple, it will not impact Facebook negatively,” said privacy spokesperson Chris Hauk at Pixel Privacy.
Google is even weighing in on the issue, taking a thinly veiled swipe in a blog post on their website at “other platforms” that they say has taken a different approach to ads privacy and, as a result, have bluntly restricted existing technologies used by developers and advertisers.
“Our goal with the Privacy Sandbox on Android is to develop effective and privacy-enhancing advertising solutions, where users know their information is protected, and developers and businesses have the tools to succeed on mobile,” Chavez said.
“While we design, build and test these new solutions, we plan to support existing ads platform features for at least two years, and we intend to provide substantial notice ahead of any future changes.” Chavez’s statement went on to say, “we believe that — without first providing a privacy-preserving alternative path — such approaches can be ineffective and lead to worse outcomes for user privacy and developer businesses.”
The bigger issue is that Facebook’s business model simply doesn’t fit with today’s privacy-conscious consumers. Facebook has been tracking users and selling them targeted advertising since long before people even realized what they were doing. Today, consumers won’t have it.
In closing, although Google’s privacy changes will likely impact Facebook in some way, it won’t be as large of a shock as Apple’s. But, we think the bigger issue with Facebook’s future lies in its privacy settings —or lack thereof. There’s no doubt that the battleground is set this year, and it’s all about privacy (again), as consumers seek to be protected from being tracked by Facebook and Google.
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