A person using iphone

Have you ever looked up a product on the internet and later noticed ads for the exact item all across your browser and social networking apps? Well, it's not a coincidence. Your apps are tracking your data—often without your direct knowledge or consent.

In April 2021, Apple took a big leap when it announced that its iOS 14.5 software update would include an App Tracking Transparency (ATT) feature. As part of the upgrade, all applications must display a pop-up to iOS users asking permission to track their behaviour across other applications and websites.

Why is Apple's new privacy policy a huge deal?

The new policy gives you complete control over which applications can collect and use your personal information. Without privacy protocols, data collected from your smartphone can be used to gain deep insights into your purchasing preferences. Whenever you search for a movie ticket or look up prices for a vacation rental, you create valuable data that helps apps understand your online habits.

Apple assigns its iOS users a unique device identifier called the Identifier for Advertisers (IDFA). This identifier is perhaps the only reliable way advertisers can track your data and measure how you respond to personalised advertisements. But thanks to Apple's new policy, a large population has the power to disable the IDFA and opt out of privacy-invading practices. And they can still enjoy all the app's capabilities regardless of whether they agree to be tracked.

Screenshot of tweet made by Apple's CEO - Tim Cook. 
Source: Twitter

For all the years Apple promoted itself as a privacy-focused company, this move has demonstrated to the world how serious they are.

While the news has been predominantly well-received by users across the world, it was an unwelcome change for many businesses—particularly Facebook.

Last year, a CNN article revealed that 98% of Facebook's revenue comes from advertising. In fact, the company's advertising revenue in Australia was expected to be $712.7 million in its 2020 financial year, a 6% increase on $674 million in 2019. With targeted advertising as a main source of revenue for the social media behemoth, the ATT feature is already causing serious havoc. Facebook released its quarterly results in February, revealing that its user base had not grown for the first time in its history. Compared to the prior quarter, the daily active user count fell from 1.930 billion to 1.929 billion. And that was just the beginning. The CFO of Meta (Facebook's parent company), revealed that Apple's new privacy changes are expected to hit its revenue hard.

"We believe the impact of iOS overall as a headwind on our business in 2022 is on the order of $10 billion, so it's a pretty significant headwind for our business."
                                                                                                       - David Wehner, 
                                                                                                               CFO, Meta

If that blow wasn't enough, Meta saw its stock collapse by more than 26% in one day, the largest single-day drop in Wall Street's history.

How is this going to impact small businesses? 

Small businesses rely on targeted advertisements to find potential clients. Targeted ads empower them to promote themselves to an audience that will likely be interested in their services. Is digital marketing the only effective way to do this? Clearly not. But while other marketing strategies can achieve similar results, mastering and implementing them may come with a price tag small businesses can't afford. 

In the past, tech giants like Facebook and Google have made it fairly simple for small businesses to run their campaigns and target consumers based on their online behaviour and specific preferences. According to a 2020 report by Alphebeta, Australian businesses gained almost AU$31.7 billion in net advertising benefits through Google Search and Ads. Despite all the rumours around its credibility, small businesses still prefer to use Google for its advanced targeting capabilities. 

A 2019 PwC report commissioned by Google highlighted that many Aussie small businesses use digital marketing to considerably increase brand visibility and save on marketing costs. The data confirms that in the last decade, many Aussie businesses have reallocated half their ad expenditure from traditional channels to digital. It was projected that this trend would continue.

However, these predictions were made long before Apple announced its new privacy policy. Now the dynamics have changed. If a large number of users refuse to share their data, paid advertising campaigns will undoubtedly become less effective, which directly affects small businesses' potential to grow. After all, Apple holds more than a 50% market share of mobile operating systems in Australia.

The future relies on privacy  

Encouragingly, since Apple took the bold initiative of prioritising user privacy over profit, other organisations have followed its path. According to a recent report, Google will soon implement new privacy restrictions that will limit unnecessary tracking across apps on its Android devices. Coming from a company like Google, this is huge because it demonstrates that privacy has become a priority for tech companies.

If you're a small business that has relied mainly on targeted advertising to find customers, the new changes are bound to cause you many challenges. Brace for change and re-strategise your marketing tactics so you can sustain yourself without depending on a single source for acquiring customers.

Yes, marketing is tricky, and it can be overwhelming to step out of your comfort zone. But the competition today is so fierce that it's high time you make extra efforts to stand out from the crowd. The key is to research and develop a thorough understanding of your target audience. Then, try experimenting with marketing strategies that align with your goal.

Fortunately, it's 2022, and marketing automation can make this process easy. If you're looking to invest in the right marketing tools, we encourage you to check out the marketing automation solution Zoho has to offer. We've worked hard to create products with valuable features that can help your business grow and stay efficient—without breaking the bank.

 

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