Apple, Google and legislators put Facebook on notice
Facebook's days as a personal data powerhouse could be numbered.
With Apple and Google continuing to make changes via their browsers and operating systems, and with the changing privacy regulatory landscape, Facebook has to adapt.
According to Facebook's VP of product marketing for ads, Graham Mudd, the platform needs to embrace a future that delivers personalised adverts without gathering intimate data. Something all players in the digital marketing supply chain will have to adjust to as the winds of change blow through the entire online ecosystem.
"A big part of building for that future is developing new privacy-enhancing technologies that allow us to do the kinds of things that we have done in the past.
Like measurement and ad optimisation, but in a way that is far more privacy-conscious, that doesn't allow either party, the advertiser or the ad platform — in this case Facebook — to learn new information about individual users."
Mudd reiterated his desire to move Facebook away from its reliance on personal data in a post on Facebook's blog.
"It's important to acknowledge that digital advertising must evolve to become less reliant on individual third-party data."
The way users are served ads is changing, and Facebook has been forced to make these decisions in light of numerous challenges to the way it traditionally gathered data to serve its Ads.
A new online advertising paradigm
Apple's recent iOS update now forces developers to get express consent from users before tracking them across other apps.
"With the rollout of iOS 14.5, app developers face a choice: display the App Tracking Transparency (ATT) prompt or don't track users at all.
At Flurry we are tracking the opt-in rate: both overall and across only apps that have displayed the prompt. The high level findings:
The Opt-In rate across all apps has risen from 11% to 15% since the rollout of iOS 14.5.
The Opt-In rate across apps that have displayed the prompt has hovered around one-quarter of users."
Meanwhile, Google looks set to go down a similar route.
Google announced in May that Google Play is introducing a new "safety" section, rolling out next year, which will require app developers to share what sort of data their apps collect, how it's stored and how it's used.
With Apple pushing hard on privacy as a unique selling point for Apple devices, it is hard to imagine Google not begrudgingly falling ever more in line creating headaches on all fronts for Google's data-hungry ad business.
Legislature in America and Europe may bring further legal pressure in the future.
Facebook has to adapt and quickly, as do marketers.
On-device learning for ad targeting
The battle for ad personalisation could now turn towards on-device learning.
On-device learning happens when an algorithm runs locally on the phone to determine which ads a user would find interesting and uses data stored on the phone's hardware to serve those ads.
Results are sent to the cloud but are anonymised and aggregated – which preserves individual privacy. Facebook believes it can provide users with a personalised experience that doesn't cross any privacy lines with this method.
On-device learning is driven by secure multi-party computation (MPC). It seems like Facebook will rely on this technology to drive its new privacy-first stance.
MPC encrypts individuals' information so that personalised ads can be served without big tech learning anything about any single person.
"These technologies will help us minimise the amount of personal information we process, while still allowing us to show people relevant ads and measure ad effectiveness for advertisers."
Whatever way Facebook et al. attempt to spin it, it's fair to say the golden era of online ad targeting looks well and truly to be coming to a close.
From here on in, it is all about damage limitation, as digital ad effectiveness drops and return on investment (ROI) falls across the board.
While on-device learning, conversion modelling, and other new-fangled innovations offer encouragement, they will hardly be as good or accurate as the features they attempt to replace.
Therefore, for clients and agencies, 2021 and beyond requires extensive testing and experimentation to retain prior performance levels as the online privacy noose tightens.