Apple’s privacy update (what does it mean for small businesses)?

Recent Apple updates give users more online privacy, by automatically blocking data-sharing with app developers.

Companies that use or sell data for advertising must now ask Apple users for permission to collect their data, if that individual has installed the latest software.

This gives the consumer more control over what happens to their non-identifying information.

Wonderful, right?

Probably not for small business owners. This could actually hurt their sales.

If most Apple users keep the default privacy settings; businesses will lose access to a trove of impersonal data about online behaviour. Brands use this information to create effective ads that are personalised towards their ideal consumer.

On the flip side (there is one):

Businesses and marketing agencies now have a fantastic opportunity to find more innovative ways to connect with people, instead of relying on cross-app data that’s often collected outside the awareness of users.

We’ll explore these implications more, but first, let’s cover the basics.

What privacy changes came with the iOS 14.5 software update?

In April, Apple launched a controversial feature that stops app developers from tracking data without explicit consent from the user.

This is called App Tracking Transparency (ATT).

How ATT works:

Every Apple user has an Identifier for Advertisers (IDFA) tag. Although this doesn’t reveal personal information, it allows marketers to collect data that can be used to target users with personalised ads.

Such IDFA data includes: age, location, spending habits and browsing history.

Previously, data-sharing was the default setting, unless Apple users chose to opt-out.

However, this all changed with the iOS 14.5 update.

Now, the situation is reversed. IDFA data tracking is switched off by default, but a prompt asks the user if they want to share their data when opening a newly installed app. The choice is now to opt into data collection, rather than opt out of it.

The Australian Competition and Consumer Commission calls this “a positive step towards genuine consumer control over data collection through apps.”

Implications for data collection:

Apple users can choose to share their data as an opt-in feature – but it’s safe to assume the majority of people will leave app tracking disabled.

Why can we make such a bold claim?

Well, this is what research suggests so far. Mobile analytics company Flurry found that only 15 per cent of worldwide iOS 14.5 users chose to allow third parties to track their data across all apps (as of May 2021).

It’s too early to say for certain what opt-in rates will be. The roll out has been slow and most Apple users hadn’t installed the iOS update on their phones at the time of that research.

Even so, Facebook is concerned about the impact on small businesses that rely on personalised ads to make sales. Facebook says the average small business stands to lose over 60 per cent in sales for every dollar spent on advertising.

It’s also worth noting the social media giant could lose 7 per cent of its own revenue, if the vast majority of users leave tracking turned off.

It’s time to adapt. Businesses shouldn’t rely only on cross-app data:

Google is considering taking a similar approach to Apple, by blocking Chrome third-party cookies by 2022. It looks as though consumers are slowly getting more control over how their data is collected and stored. Any move towards greater transparency is to be applauded.

When it comes to digital marketing:

There’s certainly a place for third-party data in advertising; but it’s a mistake for businesses to put all their eggs in one basket (by relying on cross-app data to study consumers).

We recommend a multi-channel and holistic marketing approach – incorporating different platforms such as organic SEO, content development, paid advertising, reputation management and even offline advertising.

Most importantly, businesses should look for innovative and ethical ways to collect data directly from their consumers, or hire marketing agencies that rise to the challenge.

This approach requires a combination of creativity and trust-building – which boosts your brand’s reputation and performance in the long term.

Although engaging directly with consumers requires more effort than relying on third-party data alone, it’s certainly worth it.

Businesses that go this extra mile know their fate isn’t dependent on technology companies that may restrict data-sharing policies in the future.

You have a lot more security with alternative options up your sleeve. Now is the time to experiment with strategies that help you understand consumers on a level deeper than what third-party data shows (no matter how much of it you have).

Call us on (02) 8413 6400 or fill out this form if you have questions about this update, or would like support to develop a holistic digital marketing strategy.