A thought piece on data privacy and targeted ads

1. A thought piece on data privacy and
targeted ads
Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 1
Are we finding a middle ground to data privacy?

2. Data privacy has been a hot button
issue ever since the inception of
targeted advertisements.
Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 2

3. With the onus of safeguarding data
privacy, falling on both –
social media platforms & tech
manufacturers.
Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 3

4. Apple’s IOS 14.5 Update –
How are tech manufacturers safeguarding
consumer data?
With Apple’s latest software update, making it
easier for users to opt out from apps tracking
them. Initially, Apple’s default user settings would
allow for advertisers to track in-app actions and
share user entered data with companies looking
to leverage this data for advertising purposes.
With IOS 14.5, Apple has changed their default
tracking systems and now apps must display a
prompt requesting consent from users to track
their behavior.
This change in user flow led to a great deal of users
opting out, as of November 2021 more than 62% of
iPhone users have opted out of tracking. This
doesn’t mean these users won’t see ads, but
simply that the ads they see will be contextual
(basis the app they’re on) as compared to targeted
(based on user data).
With the opt-in rate for Apple users who allowed apps
to track their behavior is pegged at 38% as of
November 2021. Companies such as Facebook, who
rely on consumer data as well as apple apps as ad
serving touchpoints, stated that this would affect their
revenues.
I also think this may harm Apple’s ad serving business
negatively. If lesser ads can be served basis user data,
this may reduce the number of clicks generated,
thereby driving up the CPC for businesses. Leading to
only concentrated bigger players using Apple’s ad
network.
Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 4
What does this mean for the advertising industry?

5. How are software giants looking to
safeguard consumer data?
With Google controlling 65.4% of the search
engine market, they’ve been proposing plans to
ban 3rd party cookies which help advertisers
track users across websites in their web
journeys.
The ban of 3rd Party cookies is not a novel idea-
Safari, Firefox, Bing, and other search engines
have already banned use of 3rd party cookies for
ad tracking on their platforms. Google being the
biggest, most used platform is looking to
integrate a piece of alternative technology called
’Federated Learning of Cohorts’ (FLOC) as a
substitute for cookies, hence allowing
advertisers to still serve contextual ads through
their display networks.
Although this will not lead to end of ad tracking
technologies and services. It would simply stop cross
website tracking, given that no new solution keeping
privacy in mind is introduced. 1st Party Data can still be
used by brands to track users with Facebook Ad
Services to serve targeted ads using email ID’s, names
and phone numbers. Although, one could argue 1st
party data is provided by the customer themselves so
company’s using it should not be deemed as unethical.
Additionally, with Google proposing solutions like
FLOC, it looks like targeted ads may just get more
secure as compared to being eliminated entirely.
Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 5
Google discontinuing 3rd party cookies – What does this mean for the advertising industry?

6. Going forward, we as advertisers
should be aware of what solutions we
have, to ensure we can still leverage
the power of data driven targeting on
ad-exchanges.
Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 6

7. How is technology pivoting to maintain balance
between revenue and giving advertisers access and the
growing demand of data privacy?
Apple’s promise to safeguard data is to let users
take control by allowing them to choose if apps
can track their in-app behavior, but user’s ad
interactions will still be tracked.
With products supported by Apple, such as
SKAdNetwork and Private Click Measurement,
advertisers would still be able to track
performance metrics for ads run through
Apple’s Advertising Platforms or other
AdExchanges looking to run ads on IOS Devices
(through apps launched on the IOS App Store.)
Hence, Apple is not moving away from serving
advertisers entirely, but finding a middle ground
and merely looking to do it in a more
transparent manner.
With all other prominent search engines having banned 3rd
Party Cookies, Google offers their own solution as a
replacement to provide a more private search and web-
browsing experience.
Federated Learning of Cohorts entails grouping users into
cohorts of interests and activities based on their browsing
habits, using clustering algorithms developed by Google
engineers. Users would still have the option to opt out of
tracking and personalized ads, but even if they didn’t opt
out, the only detail publishers would be able to track is a
user’s cohort ID (Each Cohort has an ID) and nothing else.
Although, advertisers would still have some broad ranges of
data that give them a pretty good idea of their users such as
Age, Region, Interests (Cohorts they belong to), etc.
Advertisers use this kind of information to tune and assess
campaign performance.
Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 7
Apple working with developers for API
solutions to help advertisers –
Google’s proposal of substituting 3rd Party Cookies
with FLOCs –

8. My views on what this means for the
advertising industry -
Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 8
The current shift towards transparency and
consumer choice in data sharing gives me hope a
safe middle ground can be achieved. I personally, do
not have much issue with targeted ads, I tend to get
better deals online due to me being targeted.
Nevertheless, that’s my perspective and
people should themselves get to make the
decision that impacts their data, because
it’s their choice.
Offering audiences, the choice to opt in or out of targeted advertising
will lead to agencies and brands splitting up their media spends
among targeted spends and contextual spends – for those audiences
who opted in or opted out.
What I mean by this is that a brand will run ads through
Google Display Network targeting a specific cohort (basis
FLOC being implemented) but simultaneously run ads on
top 10 websites visited by their target audience to ensure
they reach both the audiences who opted in and those who
opted out. This may cause audience overlap.
“Cost Per Clicks” are going to rise as users opting to safeguard their
interests from being tracked online is going to make it harder to target
audiences and may lead to lesser clicks.
A negative of this is that it will become harder for smaller
businesses to leverage social media marketing, but a benefit would
be larger brands will have to increase media spends to keep
bidding competitive.
I think tech companies, whether hardware or
software should explicitly mention what kind of data
is being tracked even to those who opt-in.
Each app you download should give you a detailed
breakdown of what data they’re looking to track.
Preferably, not like a T&C Agreement :)

9. Even though I don’t completely agree with the line above, we as users don’t pay Instagram,
Facebook, Whatsapp, Google, etc. One may argue our engagement fuels it, but that can
mainly be argued for social media platforms - or any product for that matter.
Something like Google, which is obviously a useful tool used by all of us, how do we
expect it to remain a profitable and a self-sufficient business, if we as users restrict the
manner in which they want to monetize their platform?
We can either take our search queries that align with our philosophies or come to a common
ground with companies like Google. As currently, advertising is one of the best ways to
monetize social media platforms, search engines, websites, and many other digital activities
that we all enjoy.
User tracking and data privacy conversations will be a constant discussion as our world
continues to integrate technology in various parts of the human experience.
Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 9
Lastly, I’d like to end on a thought.
“If you aren’t paying for it, you’re the product.”

10. Atharva Miskin | 154625198 | MKM915SAA | For Prof. Dojc 10
Sources -
• Most Contagious 2021 Report
• https://www.theverge.com/2021/4/27/22405474/apple-app-tracking-transparency-ios-14-5-privacy-update-facebook-data
• https://www.apple.com/legal/privacy/data/en/apple-advertising/
• https://www.theverge.com/2020/12/16/22178068/facebook-apple-newspaper-ads-ios-privacy-changes
• https://www.theverge.com/2020/1/14/21064698/google-third-party-cookies-chrome-two-years-privacy-safari-firefox
• https://www.vox.com/recode/2021/6/24/22548700/google-cookies-ban-delay-floc-tracking
• https://www.vox.com/recode/2021/3/3/22311460/google-cookie-ban-search-ads-tracking
• https://blog.google/products/ads-commerce/2021-01-privacy-sandbox/
• https://www.engadget.com/google-third-party-cookies-floc-test-begins-204438844.html
• https://www.illumine8.com/blog/changes-to-third-party-cookie-use-on-google-and-what-it-means-for-your-google-ads
• https://www.wired.co.uk/article/google-cookies-floc
• https://www.adexchanger.com/online-advertising/the-industry-reacts-to-googles-bold-claim-that-flocs-are-95-as-effective-as-
cookies/
• https://www.appsflyer.com/glossary/skadnetwork/