Innovation Monitor: iOS and the push to privacy

Innovation Monitor: iOS and the push to privacy

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Welcome to this week’s Innovation Monitor.

The mainstreaming of privacy in the digital sphere is fast approaching. Amongst the major players, Apple is leading the charge with a number of digital infrastructural changes. Changes to how the iPhone tracks its users in iOS 14.5 made waves among advertisers, and recently made consumer-facing changes in iOS 15 that many of you will likely be experiencing very soon.

Efforts to provide consumers with peace of mind regarding their data are incredibly important and the more technology companies do in this area, the better. We’re already seeing the ramifications of these moves, as a recent Big Technology newsletter outlines how Apple’s anti-tracking efforts are already mobilizing Facebook in a way that none of their other recent scandals have. It’s directly impacting their bottom line.

Another area that is near and dear to this newsletter is…the world of newsletters. Apple’s Mail Privacy feature will block tracking pixels, the tiny image that allows creators to know whether or not you opened their email. This type of tracking could potentially create a more valuable relationship between readers and writers, though it’s certainly been abused at times.

In this week’s edition, we dive into Apple’s incremental approach and steps around digital privacy and how these changes are impacting both big tech rivals and individual creators. Thank you for reading, and as always, if you were forwarded this email, you can easily sign up here.

All best,
Erica Matsumoto The Privacy Play Apple’s SVP of software engineering Craig Federighi is long on privacy, so much so that during his segment at the WWDC keynote, he jumped through a CG hole, down into Apple’s metaphorical privacy bunker, and called it a “fundamental human right.”

He then introduced Apple’s privacy engineering manager Katie Skinner, who described two new iOS 15 privacy-focused features for the (paid) iCloud+ service: Private Relay and Hide My Email (quotes from Vox).

Private Relay: Apple’s version of a VPN: “When you use Safari, your traffic is encrypted and routed through two relays, which means no one can intercept it and no one can see where you’re going or where you’re coming from.”

Hide My Email: Let’s you create a fake email “for the many websites that now force you to enter one just to use or read them, or make you sign up for accounts to do things like get a vaccination appointment.”

Back in April, Federighi spoke with WSJ on Apple’s App Tracking Transparency (ATT) feature in iOS 14.5, a kind of privacy shield that forces apps to ask users if they want to be tracked.

As you can imagine, this was a hard blow to apps that relied on tracking user behavior. The Federighi interview also dove into how a user’s choices on one app will affect the ads they’re bombarded with on another.

Goodbye Pixel Google’s decision to phase out third-party cookies in Chrome earlier this year showcased how one tech giant’s relatively minor decision affected an entire industry.

Google’s Federated Learning of Cohorts (FLoCs) is described by the company as “interest-based advertising on the web,” minus personally identifiable information.

Instead, you’re associated with a large group of users that have similar interests. As for browsing history, “each person’s individual… history is kept private and never shared with anybody, but the browser itself will look at the history and then assign a user to one of those cohorts.”

There was pushback from publishers and advertisers, and The NY Times even prepared a year early with a first-party data play. While privacy advocates noted this is a good direction to be going in, there were notable outliers — like the EFF, who called it the “opposite of privacy-preserving technology,” and noted that “advertisers with bad intentions will have plausible deniability — after all, they aren’t directly targeting protected categories.”

Similarly, Apple’s Mail Privacy Protection feature for iOS 15 has publishers and advertisers nervous.

According to Apple (via The Verge), the feature “stops senders from using invisible pixels to collect information about the user. The new feature helps users prevent senders from knowing when they open an email, and masks their IP address so it can’t be linked to other online activity or used to determine their location.” To Track or Not to Track While we can discuss metrics — emphasizing quality content and not fluctuating open rates — we don’t necessarily think knowing an ad-free newsletter’s open or click rate is an invasion of privacy. That said, is there room for choice, or an opt-in?

Advertisers tracking your ecommerce email behavior — and connecting this data to other source via platforms like Snowflake — this is a different story. For journalists, it might not as drastic a change: “The advertising industry has addicted itself to tracking, prioritizing bottom of the funnel metrics at the expense of great content and creative. It’s tragic,” said Alex Kantrowitz, founder at Big Technology.

Kantrowitz sells ad space in his newsletter, and has had success thanks to data gathered from reader surveys — The Markup does something similar. Kantrowitz thinks Apple’s changes actually give quality newsletters an edge. Who’s It Affecting? Tracking has become advertisers’ bread and butter, so when a site like Ad Age laments Google’s or Apple’s privacy-focused (but also self-benefiting) phase-shifts, it’s not hard to emphasize. But what about when Facebook does the lamenting?

A recent Axios piece noted: “Facebook has been saying for months that Apple’s tracking changes are not about privacy, but rather a move to assert dominance…. [it] also revealed that it had been inadvertently under-reporting web conversions, such as a sale or an app install, which has led advertisers to believe their ads weren’t as effective.”

Here is a comparison: Apple adheres to its users. Facebook adheres to its advertisers. Both mega-companies can absorb setbacks. So let’s focus on some who can’t, like smaller DTC brands.

In Marketing Dive, DojoMojo CEO Alex Song says “we’re approximately four or five months into the thrash, and I think everyone’s trying to figure out where to allocate their capital most effectively…. the way an early-stage business is operating is they need really, really disciplined controls around how they’re spending their very limited capital and resources.” The article continues:

“DTC companies have focused a large part of their spending dollars on third-party channels like Facebook, Instagram or Google Ads to build their brand and drive traffic for years. But with these new tracking regulations, DTC brands — and especially startups — may have trouble informing future merchandising decisions without data on the effectiveness of their ads.” This Week in Innovation History

September 26th, 1914: Woodrow Wilson creates the Federal Trade Commission

For a society to witness great innovations, a political and regulatory climate must be created that allows for such advancements. On this day, the Federal Trade Commission was made official by Woodrow Wilson as a bipartisan five-member body that was empowered to issue cease-and-desist orders to large corporations to curb unfair trade practices.

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