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Major Updates to User Data Are Here — How Your App’s Been Impacted

Advertising & Marketing

Isadora Teich wrote this article


In the digital marketing world, there seems to be a new panic around some sweeping change every so often.

Remember when Instagram talked about banning likes, and the internet was in an absolute uproar?

Everyone from CNBC to Cosmopolitan had their take on it. Some influencers were having public breakdowns or threatening to leave the app entirely.

While this may seem ridiculous to the casual observer, people who work in this field tailor months-long marketing plans to suit different social media algorithms, rules, and app quirks.

When these ‘rules’ shift, it can pose issues to long-held strategies, and be a major hassle to businesses, who now need to adapt.

Currently, Apple is poised to roll out some changes when it comes to user data collection. Meant to provide added transparency around what data the apps you use are collecting (and in what context) experts are saying this will majorly impact Facebook’s ad business.

But, what does this actually mean not only for Facebook, but app marketers and appreneurs?

Let’s take a look.

The Major Shift, Explained

Prior to Apple’s announcement, apps did not need to disclose they were tracking you on other apps upon leaving their platform.

Facebook is the most notorious example of tracking user activity across other apps when left running in the background. Tracking user activity so closely only adds to the picture of each consumer’s unique makeup, ripe for the offering to the hungry business advertisers which power their app engines.

But it’s important to note that Facebook is not the only app that does this. While they certainly are one of the biggest to benefit, other apps out there take advantage of this type of invasive data collection from unsuspecting every day users.

This might help these platforms provide a better experience to users in the long run, but at what cost? Click To Tweet

Moving forward, Apple will require some form of permissions box from apps notifying users when it comes to knowing about geolocation tracking, push notification permissions, etc.

How Will Facebook Be Affected?

It’s no secret that Facebook collects vast amounts of data from their users.

It’s so vast, they built up a billion dollar strong advertising engine for businesses off of the interests and activities of their users, who signed on to stay connected with loved ones.

They have come under fire in recent years for not only what they collect, but how they use it.

Many users have described the sensation of feeling as if they were being stalked by ads across Facebook and Instagram, which Facebook owns. There was an entire podcast episode devoted to this oft-heard ‘urban legend’ that Facebook can listen to our conversations, and then confront us with an ad about something we were just talking about.

This was mostly debunked, by the way — but I do believe many of us can still attest to experiencing this intriguing phenomenon a time or two.

However, that is only the tip of the iceberg when it comes to data collection.

So, it makes complete sense that Apple and other companies would strive to find new ways to protect their daily users.

This latest move comes after Apple and Google both banned use of X-Mode, a popular location tracking API previously used in many apps, including Facebook.

Facebook has not exactly gone in-depth about how these privacy changes will affect them, but they’ve made some pretty bold claims. One being, a negative impact on their ability to place ads on any third-party apps and sites on behalf of their business advertisers.

They’ve also claimed that this move will hit small developers hard, too.

Experts are saying these changes will make it more difficult for advertisers to track data and understand how effective their ads actually are.

Without the ability to target ads to the incredibly specific user profiles Facebook has access to today, it is highly likely businesses spending their hard-earned advertising dollars there will see a decrease in their return for advertising spend.

This will be an adjustment for these businesses, and diversifying your lead generation tools (if they’re heavily reliant on Facebook ads right now) is likely a good idea moving forward.

Madan Bharadwaj, Chief Technology Officer and Co-founder of Measured, a marketing measurement company, has theorized that Facebook will be hit hard. He says that they will only be able to claim credit for about 50% of their current sales.

More User Privacy For All

The world of data collection could be compared to a sort of digital wild west over the past few years. But that era is coming to an end, as world governments and companies alike seek to do more to regulate the flow of innovation. Click To Tweet

This change will essentially require mobile apps to seek users’ permission before tracking their activity, which companies used to do freely. This will restrict the flow of data they get from apps. Currently, Facebook uses this information to build profiles of its users and serve them relevant ads.

Essentially, users will have increased privacy, but many experts are claiming this will be bad for Facebook’s ad business, and other app’s monetization capabilities for that matter.

Simon Poulton, vice president of digital intelligence at WPromote, told The Wall Street Journal:

“The market dynamics here are going to shift heavily. If you are marketing on Facebook and the results are going down because the efficiency is going down, you are going to turn that down.”

Everyone vs. Facebook

Mark Zuckerberg has claimed that Apple is simply trying to use their market dominance to interfere with how all apps work, not just his.

Apple CEO Tim Cook indirectly implied that this is a conspiracy theory, and condemned Facebook for using app tracking tools that reduce human consumers to advertising products.

Facebook has been under a lot of fire in recent years due to a wide range of accusations and scandals.

People have accused it of spreading hate speech and misinformation. Users often claim to get banned for arbitrary reasons. Also, Instagram can choose to remove anything that it deems inappropriate, regardless of whether these posts violate community guidelines or not.

What exactly does “inappropriate” mean? This is incredibly vague, after all.

Essentially, many users feel that they get punished for being “too sexy” or making “offensive jokes.” Meanwhile, Facebook played a role in enabling users to organize the violent attempted coup in the capitol, and so far little has been done to address the issue.

Controversy Piles Up

Let us not forget the massive Cambridge Analytica Scandal, where data was mined improperly from Facebook users to achieve political ends on a massive scale.

It appears to many that Facebook is happy to harvest their information and censor individuals over the small things, but not ready to take meaningful responsibility for the unintended societal impact the social media titan has had.

In other words, it was only a matter of time before someone tried to do something to counter their massive reach when it comes to consumer data.

This ball has been rolling for some time now, with the EU and California already stepping up to do more to protect digital users with sweeping legislation.

What Does This Mean for Developers and Small Businesses?

Facebook has claimed that this will not only harm them, but smaller developers and businesses as well.

Dan Levy, VP of ads and business products at Facebook told reporters:

“We believe Apple is behaving anti competitively by using their control of the App Store to benefit their bottom line at the expense of app developers and small businesses. This is not really about privacy for them. It’s about an attack on personalized ads and the impact it will have on small business owners.”

Levy said that Apple wants to drive app developers to use Apple’s own personalized ad platform in the future. This platform is exempt from the new restrictions it’s requiring third parties to adopt, meaning that it will be far more efficient for advertisers and developers.

Levy also suggested that this could force the small businesses who typically advertise on Facebook and other platforms to rely more on non-online advertising sources, which aren’t nearly as impactful in a day and age where everyone’s gone digital.

And if advertisers slow down on ad spend when it comes to in-app advertisements due to lackluster performance, this could negatively impact app developers relying on this strategy for app monetization. In this scenario, it’s highly likely many would shift the burden of their app’s operating costs to users in the form of subscription fees and other in-app purchases.

Charging for subscriptions is a hugely popular monetization method for developers, and one in which Apple itself would profit heavily from due to the infamous app store “Apple Tax.” It’s estimated that half of all apps offer subscriptions already.

However, Apple claims that the exact opposite is true. It says that privacy is a human right and businesses can thrive while respecting it. That’s absolutely a sentiment we can agree with here at Chop Dawg.

Jane Horvath, Apple’s senior director of global privacy, expressed this in a letter to human rights groups:

“In fact, the current data arms race primarily benefits big businesses with big data sets. Privacy-focused ad networks were the universal standard in advertising before the practice of unfettered data collection began over the last decade or so.”

Who Is Right?

There are a lot of different opinions on what these changes could mean, what has inspired them, and who will ultimately win or lose because of them. As is usual when something new happens, there has been a lot of catastrophizing and speculation.

It is important to keep in mind that both companies have their share of controversies, and have been under fire for exactly what they’re accusing the other of doing.

For example, Apple’s exorbitant fees and restrictions for developers have been deemed harmful to small businesses by many, and may spawn an entire new world of app stores. Some even believe Apple’s recent move slashing developer fees for those under the million mark annually is an attempt to buy goodwill, but many more are happy with the move overall, as it supports the majority of app developers.

At this time, it is impossible to say with 100% certainty just how big the impact will actually be.

This means, however, that developers should operate cautiously when it comes to in-app ads. There are enough unknowns in the app development marketplace as it is.

Final Thoughts

Something that we feel very passionately about at Chop Dawg is transparency, and we have not seen many people talking about the positives of this change.

This will provide opportunities for brands to be open with users about how their data will be used, and give them options to pick what they're most comfortable with moving forward. Click To Tweet

This is a method we preach for our Partners at Chop Dawg, as it builds credibility, user trust, and resilience in the world we are moving towards — one that is finally becoming privacy (and security) conscious! Apple is just jumping ahead, and forcing everyone on their store to do this, verses companies electing to take the initiative.

Respecting user privacy and being honest with users is an amazing thing. It should be the standard of conducting business.

Ultimately, as most small businesses and app developers do not make large portions of their income by collecting specific data to build profiles on users which can be used, we do not think these changes will deal any kind of devastating blow to the majority of small businesses.

What do you think?

Talk to me.

About Since 2009, we have helped create 350+ next-generation apps for startups, Fortune 500s, growing businesses, and non-profits from around the globe. Think Partner, Not Agency.

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