The internet is changing, including how much we pay for the content and the advertisements and brands we see.
That’s because Apple and Google, two hugely influential technology companies, deploy privacy protections that prevent marketers from accessing our data when they show us advertisements. The changes are having a major impact on online advertising, which is a business base for free apps and websites that many of us use, like Facebook, TikTok, and the Weather Channel. These sites and apps now need to come up with new ways to serve ads or make money.
Here’s what that means to you.
What is happening?
For decades, advertisers have relied on “cookies,” pieces of code embedded in web browsers that can track our personal web browsing to follow us online and show us relevant advertisements. When smartphones arrived, marketers also used trackers in mobile apps to track people on apps and websites.
These advertising technologies have become incredibly powerful and effective – if you were to buy shoes, shoe ads would follow you around the internet – but with major drawbacks. This allowed marketers to create hyper-realistic profiles of us that were barely anonymous. It also opened the door for bad actors to steal people’s data and spread disinformation.
In recent years, widespread concerns about online privacy have sparked an industry-wide discussion about what to do about this tracking. Apple and Google have come in with different solutions.
What are Apple and Google doing?
In 2017, Apple released a version of its Safari web browser that blocked technology used by marketing companies from tracking people from site to site. This year, Apple also released App Tracking Transparency, a pop-up in iPhone apps that gives people the option of not being tracked on apps and websites.
In 2019, Google announced the Privacy Sandbox, a set of ideas for building a more private web. The company expects its Chrome web browser to block tracking cookies in 2023 in favor of a new system that allows advertisers to target us with ads.
This system could be called Federated Cohort Learning, or FLOC. It is about grouping people according to their interests. If you visit websites related to tennis and dogs, you may be placed in a cohort of people who share these interests. As soon as a website loads, it searches the browser for an identification code to see which group you belong to. The website can then decide what types of ads to show to your group.
In theory, this would be less invasive than current tracking methods, as advertisers would not have access to a cookie containing your personal browsing history.
Due to the reach of Apple and Google’s products – Google’s Chrome browser is # 1 in the world and Apple’s iPhone is the top-selling phone – advertisers have no choice but to adapt. Now they have to find new ways to show us ads, using less of our data. Some businesses that relied on digital ads to attract people, like small online publications, might not survive.
So what will the internet look like?
In the short term, digital ads will look different.
In the longer term, the Internet you see using Apple products may end up looking different than the Internet you see using Google products.
Let’s start with Apple. In the past, if you opened a free weather app for iPhone, maybe it used tracking technology to look at what you were doing in other apps and websites. The app would then present an ad for something specific to you, such as a restaurant where you have already ordered take out.
But since this tracking can now be blocked, the weather app must rely on other data to broadcast an announcement. It can be contextual information, such as the time of day. The result is that the ads you see may be less relevant and more random.
With Google, if the company adopts the FLOC system, it will also change the nature of the ads you see.
Today, when you use the Chrome browser to click on a pair of Nike sneakers, you are likely to see an ad for that specific shoe following you from site to site and from app to app. In the future, a website wouldn’t know that you looked at these sneakers, but it would know that you were part of a group that expressed an interest in the shoes. This means that you might see advertisements for other athletic shoes even if it is not for that specific sneaker.
Changing approaches from Apple and Google could cause web publishers to choose sides, said Brendan Eich, founder of Brave, a private web browser. If publishers are more satisfied with Google’s advertising solution, they can design their websites to perform well on Google’s browser and less well on Apple’s.
This could lead to “fragmentation” of the Web, where people see different versions of the Internet depending on the browsers they use, Eich said.
What else does Apple’s Internet version mean to me?
The good news is that you will have more online privacy thanks to Apple’s changes.
But there is a compromise. Ultimately, many online products and services can cost more.
Today, small brands can spend a modest amount to target specific customers with advertisements on different websites and apps. But since this type of tracking can now be blocked on Apple devices, small businesses may need to choose big brands like Facebook, Google, and Etsy and advertise on each of those platforms.
In other words, businesses may be forced to spend more to advertise their products on multiple properties. These higher costs would then be passed on to you, resulting in price increases.
This is already happening. Chantal Ebanks, owner of online beauty store Bella Chauni, said that after Apple’s new ad blocking went into effect, her digital promotions on Facebook’s ad network were no longer reaching so many customers. As a result, his sales have increased from thousands of dollars per month to hundreds. To compensate, Ms Ebanks has increased the price of a popular hair product to $ 13.98 from $ 9.99 and is testing ads on other platforms like Pinterest.
Eric Seufert, a marketing strategist, predicted that more iPhone apps would stop trying to make money from ads. He said they would start charging people for subscriptions or extras in the apps.
The switch to subscriptions has been around for some time, but it is expected to accelerate. Between 2017 and 2020, the share of top video games offering subscriptions in Apple’s U.S. App Store increased from 11% to 18%, according to a study by SensorTower, a mobile application research company.
What else do Google’s changes mean to me?
As Google tries to reinvent ad targeting rather than kill it altogether, its users will continue to see targeted ads. The advertising methods offered by the company could also create new problems, security experts said.
Advertisers could combine people’s FLOC IDs with other information to continue to locate them, said Eric Rescorla, chief technology officer at Mozilla, which makes the Firefox web browser.
The system could also place vulnerable people in groups where they are disproportionately targeted by exploitative ads, said Bennett Cyphers, technologist for the Electronic Frontier Foundation, a digital rights nonprofit. Those earning a lower income, for example, could find themselves in a group that receives advertisements for payday loans and cryptocurrency scams, he said.
Google said FLOC was one of many proposals it was testing. Ben Galbraith, director of product management for Google’s Chrome browser, said simply blocking cookies would lead to worse privacy outcomes as advertisers find more invasive ways to track people.
The company also said it has mechanisms to prevent people from being grouped into sensitive cohorts and that FLOC IDs will change every seven days to prevent them from being tracked.