Apple and Google are changing the rules of digital advertising: Is your business ready?

Apple and Google have recently announced privacy changes that will upend how businesses conduct online marketing and advertising. The moves come amid mounting international concern about privacy and how consumer data can be used.

The changes could have significant impacts on businesses. Online ads on the platforms are likely to be less effective at targeting consumers and converting sales. If you use their services, you will also need to pay closer attention to customers’ privacy concerns.

What is changing

Apple has started requiring user permission for apps to track location and online activity and share that information with other companies, such as marketers. The requirement came as part of its iOS 14.5 operating system update.

The step followed Google’s announcement that it will stop selling digital ads targeted to a consumer’s web history. Google will also phase out cookies that track users’ browsing activity. Apple blocked such cookies in April 2020 on its Internet browser Safari. The Firefox browser did so in 2019.

Other big tech companies are also reviewing their digital privacy policies or face pressure to do so. The steps come as governments increasingly move to update online privacy and data protection rules.

• In 2018, the European Union adopted the General Data Protection Regulation, which imposed strict online privacy requirements.
• The California Consumer Privacy Act, adopted in 2020, introduced similarly restrictive rules.
• In Canada, Parliament is deliberating a proposed new consumer and digital privacy law, Bill C-11.

How could digital advertising changes affect your business?

The moves by Apple and Google could lead to important changes for Canadian businesses. Online ads won’t disappear. But the measures could make targeting of digital ads less personalized, reducing their effectiveness and conversion rates. The fear is that many consumers won’t opt in to be tracked under Apple’s new rules.

Facebook has come out strongly opposing Apple’s changes, saying they will hurt small businesses. The social media giant says that without personalization, small businesses could see a 60% drop in website sales from ads on Facebook’s family of apps.

“These changes will directly affect their ability to use their advertising budgets efficiently and effectively,” wrote Dan Levy, Facebook’s Vice President, Ads and Business Products.

Google, for its part, says ads will still be partially personalized through its new tracking system that will allow users to be tracked and grouped anonymously into “cohorts” based on similar interests. Consumers can then be targeted with ads based on their cohort, rather than individual data. Google says the system strikes a balance between privacy and business needs and that conversion rates will be nearly the same as under the earlier system.

What can you do to adapt?

How should businesses respond? We suggest these steps:

Get informed

The first step is awareness. It’s important to make sure marketing and sales teams, financial leadership and any outside agencies you work with are informed about what practices are allowed, what is in transition and what is no longer permitted.

Are you collecting cookies? If you have customers in jurisdictions with new rules, which ones apply to you and are you in compliance? What are the best practices and are you following them? What new opportunities do the changes present?

Digital privacy will continue to evolve in coming years, which means your team will have to keep educating themselves and continue adapting.

Monitor your ad performance

Keep a closer eye on the performance of your advertising to gauge the impacts of changes and consider adjustments. Compare how you’re doing with past performance metrics and industry benchmarks. You may eventually need to shift some ad spending to better-performing channels and campaigns.

You might also have to optimize your marketing budget mix depending on your ad performance. Seasonal businesses could be more affected since it may take multiple seasons to realign their strategy.

Harness your own data

As consumer data becomes more closely guarded, it’s more important than ever to look at your own information on customers and get more resourceful about harnessing it to its full potential. Data can potentially come from your customer relationship management system, client surveys, website and app traffic, social media and subscriptions.

Consider technology investments

Consider investing in privacy preserving technology, which allows data analysis while preserving consumer data privacy. Another technology to consider is big data cloud advertising platforms, which allow large amounts of disparate data to be collected in one place and analyzed. You can use them to create audiences based on attributes shared across different ad platforms.

Be mindful of privacy concerns

Businesses that act in ways which respect consumer privacy and transparency concerns are likely to enjoy greater client loyalty and positive brand impacts. Those that don’t could adversely affect their reputation. Keeping your customers at the forefront will pay off in the changing landscape and allow you to adapt.

Think about ISO certification

Businesses can step up their IT security and privacy efforts with ISO certification.

• ISO 27001 is the international standard for securing information, including customer data.
• ISO 27701 is an extension of ISO 27001, adding privacy standards that are in line with new international regulations.

Technology and access to personal data are evolving more quickly than legislation and regulations. Businesses that don’t adapt now may have to invest more money and time to do so later. Those that stay ahead of the changes will be best positioned to mitigate impacts and seize new opportunities.

Don’t hesitate to contact us if you need advice to navigate this changing environment.