The number one obsession in digital marketing for the last decade or so has been targeting. For all the money in ad-tech and sponsored content and other 21st century marketing things, the actual experience of being advertised to and, for lack of a better word, effectively propositioned by companies online is pretty lame. Targeting promises two things:
- You don’t have to waste time/money/effort advertising to people who are unlikely to want your product
- You can communicate to people who are likely to be interested in increasingly personalized (and thus more effective) ways.
This is basically the promise of the whole digital marketing ecosystem. Always send the right thing to the right people, and be able to do it easily and in many cases automatically.
For years, we’ve seen everything about the 21st century consumer economy move in this direction. Free products, exploding social networks, huge investments in companies with basically no business model, etc., etc., all the standard Valley jokes, essentially — all based on the idea that marketing information would get more precise, more valuable, and allow for better, more precise targeting. In fact, this has been going on for so long now that it’s simply assumed by both business and consumers that this data exists, that it’s accurate, and that it’s only going to be more accurate. To think otherwise is to be completely out of touch with “technology”.
And then… there’s Apple. Perhaps you’ve heard of them. They recently became the first two trillion dollar company, and even if you’re not into meaningless psychological market metrics, they’re fabulously profitable with no accounting gimmicks and own most of the profit inside the world’s most critical and lucrative consumer market. When people come after Apple about anti-trust, it’s not to argue that Apple has a monopoly on phones — it’s that Apple has a monopoly on the market on payment processing for selling things on Apple phones. Think about that for a second. It’s incredible! Huge (although comparably small) companies gird themselves for battle against Apple not to dethrone them from their position, but simply to demand better treatment on their devices. We’ve completely conceded the market for “good all-in-one-digital devices that the average person will actually like” to these guys. Whether it’s because Apple is amazing, or the rest of the world just doesn’t have the stomach/discipline to match, that’s an enormous concession to make, and implies that Apple is effectively unbeatable at this.
Now, where the collision comes is with the idea of data privacy. Apple is notoriously bullish on privacy; they’ve pushed (and promoted) everything from anonymous “Login with Apple” services to on-device computing for face recognition in an attempt to leverage the idea that your data should remain private and in your control. They do this because, unlike everyone else, they make money from you purchasing their products and services, and many (most?) other huge tech companies do not. So while privacy may be some sort of cultural value at Apple, and that’s cool and all, more importantly it’s a clear point of differentiation and value for a brand that’s often associated with relatively high costs, but generally good customer experience. In other words, it’s in Apple’s business interest to highlight the downsides of having your personal data sold, and to deliver solutions that make that practice less prevalent. There’s no opportunity cost to them for doing so (they’re not good at making non-trivial amounts of money off your personal data), but there’s upside in providing value that almost everyone else they could possibly compete with is fundamentally, economically incapable of providing.
As with all the other big tech companies, Apple isn’t just a company — it’s a platform. But unlike something like Facebook, which is a very large, influential platform, from a dollars perspective, Apple is the platform. If Apple won’t let you do it, there’s simply a very low ceiling on how much money you can make doing it. That’s not because consumers don’t have non-Apple choices — thanks to Android, they have many — but because they don’t actually like those other choices, and in general the ones who spend money have shown they’re going to choose their iPhone and some other app over your app and some other phone.
See where I’m going, here? Increasingly precise data collection is inevitable, because… we know how to do it, I guess? I mean hey, look, GDPR was supposed to be the death of all this and we wormed our way around that, didn’t we? But meanwhile, the most important digital platform on the planet essentially has no prospective rivals, famously promotes a regulated, walled-garden approach at the expense of third parties in the name of customer experience, and — oh yeah — has already shown that they DGAF about your double bank shot monetization strategy.
Ad-tech and user tracking is real, but it’s also a lot flimsier than I think most consumers (and even many marketing people) realize. Learning what marketing executives like to see has lead to a lot of cosmetic “improvements” (“13% of your users like snowboarding! It’s machine learning!”) layered on top of the same flawed technology that still spends a lot of time crossing its fingers and hoping that Apple doesn’t close a web loophole via mobile Safari, and that you don’t happen to clear your cache. Ad-tech has the bullshitters on its side, along with a lot of people who NEED it to be real to justify whatever dumb unicorn or unicorn-ecosystem they’ve invested in, but the truth is that in any sort of conflict with a company in Apple’s position, it’d be less David and Goliath and a lot more “ant, boot“.
So maybe Amazon will eventually have something better to retarget me with than the trash can I bought yesterday. It’s certainly not impossible. But if I were a marketing-tech company, I’d be a lot more scared of Tim Cook than Congress.
POSTSCRIPT: My Spidey-Sense must have been tingling..
… because here we go. It’s not the first skirmish, and it won’t be the last, but the theme that runs through all of these is that advertisers/data brokers really have no leverage. They’re effectively scavengers, so there’s not a lot they can do when the town comes and picks up all the garbage. When you compare platform leverage, Apple’s is “you aren’t going to be on our platform unless you can get the government involved”, and Facebook’s is “we’re going to tell everyone you are terrible“. Only one of those things is actual leverage.