SAN FRANCISCO (NYTIMES) – Apple introduced a pop-up for iPhones in April that asks people for their permission to be tracked by different apps.
Google recently announced its intention to disable tracking technology in its Chrome web browser.
And Facebook said last month that hundreds of its engineers were working on a new method of serving ads without relying on people’s personal data.
The developments may seem like technical tinkering, but they were tied to something bigger: an intensifying battle for the future of the internet.
The struggle has entangled tech titans, turned Madison Avenue upside down and disrupted small businesses.
And it heralds a profound change in the way people’s personal information can be used online, with sweeping implications for how businesses make money digitally.
At the center of the brawl is what has been the lifeblood of the Internet: advertising.
Over 20 years ago, the Internet revolutionized the advertising industry.
He gutted newspapers and magazines that had relied on selling classified and print ads, and threatened to dethrone television advertising as the primary vehicle for marketers to reach large audiences.
Instead, brands ran their ads on websites, with their promotions often geared to people’s specific interests.
These digital ads fueled the growth of Facebook, Google and Twitter, which offered their search and social networking services for free.
But in return, people were being tracked from site to site by technologies such as “cookies”, and their personal data was used to target them with relevant marketing.
Today, this system, which has grown into a $ 350 billion (S $ 372 billion) digital advertising industry, is being dismantled.
Driven by fears over online privacy, Apple and Google have started revamping the rules for online data collection.
Apple, citing the privacy mantra, has deployed tools that prevent marketers from tracking people.
Google, which relies on digital ads, is trying to have it both ways by reinventing the system so that it can continue to target ads on people without exploiting access to their personal data.
If personal information is no longer the bargaining chip people give for online content and services, something else has to take its place.
Media publishers, app makers, and e-commerce stores are now exploring different avenues to survive a privacy-friendly internet, in some cases overturning their business models.
Many choose to charge people for what they get online by charging subscription fees and other fees instead of using their personal data.
Jeff Green, CEO of Trade Desk, an ad technology company in Ventura, Calif. That works with major ad agencies, said the fight behind the scenes is fundamental to the nature of the web.
“The Internet answers a question it has struggled with for decades, namely: how is the Internet going to pay for itself? ” he said.
The fallout can hurt brands that have relied on targeted advertising to entice people to buy their products. It might hurt tech giants like Facebook at first, but not for long.
Instead, companies that can no longer follow people but still need to advertise are likely to spend more with the biggest tech platforms, which still have the most consumer data.
David Cohen, CEO of the Interactive Advertising Bureau, a business group, said the changes will continue to “drive money and attention to Google, Facebook, Twitter.”
TALE OF TWO INTERNETS
The changes are complicated by opposing views from Google and Apple on how much ad tracking to recall.
Apple wants its customers, who pay extra for their iPhones, to have the right to block tracking entirely.
But Google executives have suggested that Apple has made privacy a privilege for those who can afford its products.
For many people, this means that the internet can start to look different depending on the products they use.
On Apple gadgets, advertisements may only be somewhat relevant to a person’s interests, compared to highly targeted promotions on the Google web.
Website builders can optionally take sides, so some sites that work well in Google’s browser might not even load in Apple’s browser, said Brendan Eich, founder of Brave, the private web browser. .
“It will be the story of two Internets,” he said.
Companies that don’t keep up with the changes risk being crushed.
Increasingly, media publishers and even apps that show the weather are charging subscription fees, much like Netflix is charging monthly fees for video streaming.
Some e-commerce sites are considering raising the prices of the products to maintain their income.
Consider Seven Sisters Scones, a mail order bakery in Johns Creek, Ga. That relies on Facebook ads to promote its items.
Nate Martin, who heads digital marketing for the bakery, said that after Apple blocked ad tracking, its digital marketing campaigns on Facebook became less effective. Since Facebook could no longer get as much data on customers who love baked goods, it was more difficult for the store to find interested shoppers online.
“It all came to a screeching halt,” Martin said. In June, the bakery’s sales fell to US $ 16,000 from US $ 40,000 in May.
Sales have since remained stable, he said.
To offset the declines, Seven Sisters Scones discussed increasing the prices of sample boxes to US $ 36 from US $ 29.
Apple declined to comment, but its executives said advertisers would adapt.
Google said it was working on an approach that would protect people’s data, but also allow advertisers to continue targeting users with ads.
Since the 1990s, much of the web has been rooted in digital advertising. During this decade, a piece of code implanted in web browsers – the “cookie” – began to track users’ browsing activities from site to site.
Marketers used the information to target advertisements to individuals such that a person interested in makeup or bicycles saw advertisements on those topics and products.
After the introduction of the iPhone and Android app stores in 2008, advertisers also collected data on what people were doing in apps by planting invisible trackers.
This information was linked to cookie data and shared with data brokers for even more specific ad targeting.
The result was a vast advertising ecosystem that underpinned free websites and online services.
Sites and apps like BuzzFeed and TikTok have thrived using this model. Even e-commerce sites rely in part on advertising to grow their businesses.
But distrust of these practices began to grow.
In 2018, Facebook became embroiled in the Cambridge Analytica scandal, where people’s Facebook data was inappropriately collected without their consent.
In the same year, European regulators enacted the General Data Protection Regulation, laws designed to protect people’s information.
In 2019, Google and Facebook agreed to pay record fines to the Federal Trade Commission to settle the privacy breach allegations.
In Silicon Valley, Apple has reconsidered its advertising approach. In 2017, Craig Federighi, head of software engineering at Apple, announced that the Safari web browser would prevent cookies from tracking people from site to site.
“It’s kind of like you’re being followed, and it’s because you are,” Federighi said. “Not anymore.”
Apple last year announced the creation of a pop-up in iPhone apps that asks users if they want to be tracked for marketing purposes.
If the user says no, the app should stop monitoring and sharing data with third parties. This sparked an uproar from Facebook, which was one of the affected apps.
In December, the social network ran full-page newspaper ads saying it was “standing up to Apple” on behalf of small businesses that would be hurt once their ads could no longer find specific audiences.
“It’s going to be tough for them to navigate,” Facebook CEO Mark Zuckerberg said.
Facebook is now developing ways to target people with ads using information collected on their devices, without allowing personal data to be shared with third parties. If the people who click on the deodorant ads also buy sneakers, Facebook can share this template with the advertisers so that they can serve sneaker ads to that group.
It would be less intrusive than sharing personal information like email addresses with advertisers.
“We support giving people more control over how their data is used, but Apple’s far-reaching changes have happened without input from the industry and those most affected,” a Facebook spokesperson said.
Since Apple released the pop-up, more than 80% of iPhone users worldwide have chosen not to follow, according to ad technology companies.
Last month, Peter Farago, an executive at Flurry, a mobile analytics company owned by Verizon Media, posted a post on LinkedIn calling it the “hour of death” for ad tracking on iPhones.