Facebook’s stock is down nearly 45% from last year’s highs and most people blame Apple’s 2021 privacy measures on the iPhone. This week, Google announced similar massive changes to Android, causing another 6% drop this week and ousting Facebook (ok, Meta) from the top 10 global companies by market capitalization.
But are Google’s privacy measures as dangerous to Facebook’s revenue as Apple’s?
In a word: no.
At a glance, it seems possible that they are much worse. After all, Android is the default mobile operating system for 85% of the planet. But the devil is in the details. And … in the differences between Google and Apple.
“Google is an advertising company, and any push for true privacy will hurt their revenue, which they wouldn’t,” says Dmitry Gerasimenko, CEO and founder of alternative search engine Ahrefs.
Privacy advocates tend to agree.
“It won’t be as restrictive as Apple’s app tracking transparency feature,” said privacy spokesperson Chris Hauk at Pixel Privacy. “Google’s new policy will surely have an impact on Facebook, but it will be useful for both users and Facebook. Unlike Apple, this will not negatively impact Facebook.
The Privacy Sandbox offered by Google for Android has certain advantages in terms of privacy. The key change: Google kills the Google Ad ID. It’s simply a string of numbers that can be used to track your devices in the mobile ecosystem as you use apps, view ads, click links, and install new apps. The Apple version is IDFA, and where Apple changed the world by requiring consumer consent from companies using your IDFA and sharing data with other companies, Google intends to phase out GAID altogether.
Sounds worse for advertisers and better for consumer privacy, right?
Not so fast.
Advertising identifiers are only tools, designed for a specific purpose. Google intends to swap one highly sharable tool, GAID, with four much safer on-device tools.
- Topicsto target the right ad to the right person.
- Flightto retarget new ads to “oldies” who may have shown interest in the past.
- Attribution reportsto tell advertisers which ads worked without revealing full details about you and your business.
- Running the SDKa section of the phone protected by a firewall in which to isolate advertising tools, in order to limit their ability to see and record what people are doing.
The result is a pretty comprehensive set of tools to do what businesses need in the advertising ecosystem on the one hand, like…
- Where should I post ads?
- Who should I advertise to?
- How do I show ads to people who used my product?
- How do I know if my ads worked?
- Do people like this creative in my ad or that one?
- How can I be more effective in the advertising campaigns in which I invest?
…and also to provide a lot more privacy for people who use Android on the other hand. Current web ad targeting works by sucking data from your online activity through third-party cookies: Visit a website that sets a cookie and it can track you around the web. And current mobile ad targeting works by sucking data from your app activity through the Google Ad ID.
It all goes away.
Targeting now happens on the device. In the palm of your hand, basically.
No data needs to be sent to an adtech company to be stored and compared to the ads they need to sell. (And kept in a huge graph of devices and people for future reference.) Instead, Google’s new technology matches topics you might be interested in with ads right on your own device. And you’ll be able to see which topics the tech thinks you’re interested in and control them: by editing them manually.
This gives humans a lot more control over the types of ads they choose to see while allowing advertisers to do what they want to do to grow their business.
“Google is trying to balance the growing demands of privacy-conscious customers and regulators with the financial demands of developers and advertisers,” says Daniela Sawyer, founder of FindPeopleFast.
There’s certainly a lot more technology here for measuring advertising and marketing safely than what we’ve seen in Apple’s SKAdNetwork, the functionality it brought to the market for measuring marketing effectiveness. But that’s literally to be expected. After all, Google East an ad network, and Apple only has one. Google should therefore know more about how the advertising ecosystem works than Apple.
So the result is a better environment for advertisers, and an extension that shouldn’t hurt Facebook as much (ok, Meta).
“Google has taken a more inclusive approach with its Privacy Sandbox, compared to Apple’s transparent app tracking,” says Claudiu Cogalniceanu, founder of FindMyData. “With Google’s inclusive approach, I predict the Privacy Sandbox will help advertisers and consumers reach consensus, which will also help Meta recoup their loss.”
While recouping the massive Meta loss might be a step too far, Google’s new ad tech for Android is clearly less disruptive to the ecosystem than Apple’s ATT.
Even better, from Meta’s point of view: it’s at least two years from now.
Google promises not to deprecate GAID for at least two years. Apple initially gave about a quarter of a year’s notice, if at all, before caving in for a few more months to allow the ecosystem to prepare.
As Jane Kovalkova, CMO of The Credit Thing notes, there is plenty of time to prepare in this case.
“The goal is to develop effective solutions that don’t need device-level identifiers and limit user-level tracking across developers’ various apps,” Google says. “While these new solutions are in development, Android does not plan to make any changes to Advertising ID’s core use cases for at least two years, and will provide substantial notice prior to any future changes.”
The world will change however.
Facebook will definitely get less data.
“Google’s Privacy Sandbox will integrate a topic and interest-based advertising system and Chrome’s Fledge API,” says Ryan Yount of LuckLuckGo. “This will allow developers to identify custom audiences without sharing a user’s data with third-party apps such as Facebook. Therefore, this means that third-party companies such as Facebook and YouTube will still do ad targeting but will not have access to user data.
And it’s not like Meta is without resources of its own. After all, the company literally owns multiple platforms at the scale of a billion users: Facebook, WhatsApp, Messenger, and Instagram. Facebook’s targeting capabilities are extremely detailed and can be targeted across a user’s entire life story, says Stephen Curry, CEO of CocoSign. As long as Facebook is able to capture and monetize this data, he says, Facebook will remain a major advertising platform.
It should be noted that Google has a strong incentive to create an advertising model that is both strong and socially acceptable.
Its revenue for the year 2021 jumped 41% to $257 billion, including $75.3 billion in the fourth quarter alone. And advertising is the lion’s share of that money.
Google is therefore not going to kill the goose that lays the golden eggs. Which, of course, means Facebook can get some of that gold, too.
“About 90% of Android apps are free but contain ads,” says Dorothea Hudson, digital marketing expert at Expert Insurance Reviews. “Google therefore has a better interest in keeping these advertisements than Apple. Google’s privacy sandbox seeks to eliminate ad tracking while retaining ads. Google’s approach is less blunt than Apple’s because they deliberately seek to be less disruptive than Apple.
Apple’s privacy measures through App Tracking Transparency have significantly disrupted Facebook’s ability to see our activity in third-party apps. This near-instantaneous interruption of the data stream hurt Facebook’s ability to target ads to the right people and prove that the people who saw the ads took action.
In contrast, Google’s Privacy Sandbox for Android offers new ways to target on-device in ways that protect privacy.
This will have its own impacts – and it may provide a more level playing field for all ad networks – but it won’t give Meta/Facebook the heavy hitting that Apple’s iOS 14.5 and App Tracking Transparency did.
Facebook stock is down massively, but I tend to think the impact of ATT is priced in, and the market is also reacting to years of bad privacy press, negative social media impacts , reports of toxic behavior on Facebook and other platforms, Facebook’s poor execution on platforms like Shopping, TikTok’s perceived impact on Facebook user growth (or lack thereof), and Meta CEO Mark Zuckerberg’s sudden multi-billion dollar commitment to R&D on metaverse projects.
That said, don’t count the company (or founder) yet:
“When something goes low, Zuckerberg goes high,” says Rachel Winer, SVP Digital at ROKK Solutions. “As Facebook’s earnings and share price are low … Zuckerberg will go high with a punch to Google (and Apple). Don’t count him out of combat.
Meta’s work on the metaverse is, of course, an attempt to invent the next major computing platform for mankind, and in doing so, to have a founder/creator interest in it, and thus finally come out of under the boots of Apple and Google, which creates and owns today’s dominant computing platform: mobile.
But it’s a long, uphill battle with uncertain results.
(It should be noted after an article like this that I do not manage my investments personally but through a third party, and I don’t actually know if any part of it is invested in Facebook.)