Apple Will Now Ask Permission Before Showing Its Own Targeted Ads
iOS 15 users must have received prompts from the Apple App Store asking permission to serve ‘Personalized Ads’ which was earlier enabled by default.
So, what does Apple’s Personalized Ads Feature mean?
Personalized ads are Apple’s way to serve relevant ads in the App Store and Apple News based on what you read, search, and purchase on Apple devices.
Apple rolling out the new prompt to ask permission is a big deal but there is a catch.
The company used to earlier collect information by default and users had to navigate multiple levels in the settings to disable it which is contradicting Apple’s privacy-first image. So, users using iOs14 and older versions still have the personalized ads feature enabled by default.
Similar News: Apple In-app Purchase Policy – Understanding The Pros & Cons
How Does The New Consent Prompt Work?
If you are running the recent iOs15 beta, Apple’s Ad Targeting or Personalized Ads appears as a pop-up notification when you open the App Store. In the pop-up, Apple explains the ads will help you discover relevant apps, products, and services.
Image Credit: Verge
With privacy-first priority, Apple required other developers to seek users’ permission from the users with App Tracking Transparency (ATT). Apparently, Apple is now showing that they are also treating itself the same as other developers.
Similar News: Explained: Why Facebook thinks Apple’s iOS 14 privacy push will have a severe impact on business
But, Why Make This Move Now?
The fact that it was on by default led to Antitrust scrutiny especially when it has limited third-party ad networks with controversial ATT policy but did not follow a similar system to ask permission for its first-party advertising.
As pointed out by Verge rightly, Apple’s language choice is also worth examining – developers are expected to ask a user for consent to be tracked whereas Apple refers to what it is doing as ‘personalization.’
Apple’s rule for other developers: you have to ask users if they want to be “tracked” for ad targeting
But Apple’s own ad tracking is “personalization,” which sounds much less nefarious https://t.co/hsAQuT8zYb
— Alex Heath (@alexeheath) September 2, 2021
This new change brings Apple’s ad policy in line with what third-party developers were required to as a part of the App Tracking Transparency. This can be viewed as a tiny concession on Apple’s part in response to the current antitrust scrutiny in France. According to the complaint against Apple, the users were “insufficiently informed about the use of processing of its personal data” within its own app for ad targeting.
With this small step of ad-tracking pop-up, Apple is conveying “that they are trying to play fair”.
Similar News: Australian Watchdog to Scrutinize Apple And Google App Store Practices
What Is The Final Score?
For iOS14, no permission is required to run personalized ads.
For iOS 15, Apple plans to make a request.
Other developers will have to take the consent and adhere to the law and Apple platform rules with the only question left, will these multiple consent dialog boxes make the user experience distressing?
Also Read: You Can Now Charge For Tweets With Twitter’s New ‘Super Follows’
Facebook Plans a Privacy-Focused Approach to Rebuilt Its Ad System
A remarkable shift by Facebook is underway as it plans a new privacy-focused revamp of its advertising system. It reveals to place more value on user privacy and less reliance on data collection. The social giant business is known for its ability to track users across the internet and utilize the information for its ad targeting processes. Owing to impending regulation and data collection limitations, it is working to create a system that delivers personalized ads without any individual user’s data. Facebook’s VP of product marketing, Graham Mudd explained,
With Apple and Google continuing to make changes via their browsers and operating systems, and with the changing privacy regulatory landscape, it’s important to acknowledge that digital advertising must evolve to become less reliant on individual third-party data. That’s why we’ve been investing in a multi-year effort to build a portfolio of privacy-enhancing technologies and collaborate with the industry on these and other standards that will support this next era.
The privacy-enhancing technology includes cryptography and statistical techniques that will improve ad measurement while relying less on individual data.
We are optimistic that new privacy-enhancing technologies will prove that personalization remains possible and effective as our industry evolves to become less reliant on individual third-party data. These technologies will help us minimize the amount of personal information we process, while still allowing us to show people relevant ads and measure ad effectiveness for advertisers.
Another key area that the social giant is exploring is ‘on-device learning ’. It is a technology that will process data locally on their device rather than sending individual data to a remote server or cloud to determine the best ads for the user. The results are later sent in an anonymous format to the advertisers. However, Graham Mudd explained the challenge in an interview with The Verge,
I think one of the challenges with on-device learning is that the compute resources required to do it are obviously under the control of the operating systems themselves.
The stakes couldn’t be higher for Facebook to get the systems right. Graham Mudd said that,
We definitely see that personalization will evolve very meaningfully over the course of the next five years. And that invest in Privacy-Focused will benefit all of our customers and enable us to help shape that future state of the ads ecosystem.
Facebook’s major changes come amidst government scrutiny and Apple’s App Tracking Transparency (ATT) update. Furthermore, even Google is exploring an advertising system that is more user-privacy-centric.
Credit: Social Media Today
Apple’s new prompt to ask for permission to track the users for targeted ads is likely to hurt Facebook’s revenue growth. However, the true impact of prompt is still evolving and the report shows that not many iOS users are opting for app tracking. Therefore, this leads to a broad range of data tools that are required to attribute ad responses. Facebook is developing a new range of options on this front.
Providing more insight the social firm is working on privacy-enhancing technologies (PETs) for ads that will minimize data collection, protect personal information while preserving ad measurements.
So, it is working to explore various ways to implement these approaches to new measurement solutions,
Last year we began testing our Private Lift Measurement solution with select partners, which uses a privacy-enhancing technology called secure multi-party computation. This helps advertisers understand how their campaigns are performing while adding extra layers of privacy to limit the information that can be learned by the advertiser or Facebook. This solution will be broadly available to advertisers next year.
To give you a brief, Secure multi-party computation (MPC) allows two or more organizations to work together while limiting the information that either party can learn. Data is encrypted end-to-end: while in transit, in storage, and in use, ensuring neither party can see the other’s data.
The social giant emphasizes that for these technologies to be successful, they will need industry cooperation.
These technologies will only be successful for people and businesses of all sizes if there is industry collaboration and a shared set of standards. That’s why we are calling on platforms, publishers, developers, and other industry participants to work together — on these technologies and other privacy-focused standards and practices.
Google Tax: How The 2% Levy Affects Advertisers And Beyond!
Starting in October, Google is planning to pass on India’s 2% equalization levy, which went into effect in April 2020, to its clients whose ads are viewable in India.
Even if both the buyer and the seller are not based in India, the Google tax applies if the advertisement is visible in the country.
In 2020, the Indian government broadened the scope of the equalization fee, which had been levied on cross-border digital transactions since 2016 in an attempt to tax Google’s digital advertising revenues from India.
This was done to incorporate any acquisition made by an Indian or India-based agency through an overseas eCommerce portal.
A Google spokesperson went on record to say –
From 1st October 2021, we’ll be adding a surcharge to the invoices we send to non-Indian customers whose ads are viewed in India. The surcharge is to cover part of the costs associated with complying with the Indian Equalization Levy, which only impacts non-Indian advertisers. We will continue to pay all the taxes due in India and elsewhere
Here we can also recall how Apple since October 2020, is passing on the 2% equalization charge to Indian customers who buy applications or other products from its iTunes or App store. This excludes the 18 percent goods and services tax (GST).
This was essentially a levy on any programme purchased from Apple’s iTunes store.
Now, Google is taking a step ahead.
It is creating a situation where even though neither the buyer nor the vendor is an Indian if the advertisement is viewable in India, the tech giant’s tax will be charged.
Ajay Rotti, partner, Dhruva Advisors said that there will be a variety of circumstances where the service receiver is not an Indian firm, but the equalization levy will apply if the advertisement is directed at an Indian customer.
He added –
Google’s interpretation is in line with the provisions of the law which covers certain specified circumstances where the levy would apply. This would add to the collections of the revenue department going forward
The new rules identify online selling goods or services as any purchase made online, any payment made online, or even an accepted offer made online, and they apply to all transactions.
Even if only a tiny portion of a transaction was completed online and the remainder was completed offline, the 2% Google tax might be charged.
By the virtue of this Google tax, many businesses are now concerned that the charge will apply to a wide range of transactions, including hotel reservations, software purchases, and even the purchase of specific components from other countries.
According to legal experts, because of the way the law is written, even ERP (enterprise resource planning) systems—internal software systems that many businesses use—could potentially be deemed an internet platform and so be subject to the levy.
A senior lawyer said –
The way the equalization levy law is worded, almost every transaction that happens on the internet could potentially face the tax. Also, many companies are relooking at their existing structures to see if they can park the India specific activity in a separate domestic entity to avoid complications around equalization levy
According to tax specialists, Google‘s interpretation will have an influence on a number of other businesses.
Because tax rates in some countries are near to zero, several firms have formed holding entities in tax havens where most earnings are gathered or where intellectual property is held, saving taxes on overall revenue.
Apple In-app Purchase Policy – Understanding The Pros & Cons.
What is Apple’s new in-app purchase policy & how does it affect people from different areas?
In-app purchases are used to sell content in numerous categories. Available content ranges from services, new features, and even subscriptions. On an Apple store, a user is independent to make purchases on/for an iPad, iPhone, Apple watch, and Television.
The in-app purchase is divided further into four main categories:
- Consumable: An in-app consumable purchase could be anything that can be exhausted with time or usage. These mostly include subscriptions, purchases for games like coins or gems, or maybe progress in a particular game.
- Non-Consumable: Non-consumable items usually come with one-time purchase options. These items can include filters for a phone camera, business application with one-time purchase options e.t.c.
- Auto-Renewable section: These services come with a subscription that gets exhausted in a time frame. The consumer needs to refuel the quota to keep the service working. These services could be a subscription to a monthly magazine or a yearly purchase for an upgraded feature of an application.
- Non- Renewing Subscription: There are certain limited-time features or one time purchases bought from the app store. Due to their fewer availability, it is hard to renew their subscriptions. Therefore they remain as a non-renewing subscription due to their limited availability.
In the month of February, Apple made some crucial changes to its in-app purchase policies. However, Apple received criticism for these policies.
In a statement issued by Apple to the media, regarding the in-app purchase policy; “All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the apps.”
The statement raised concerns, as the publishers/developers of these services had to pay a large chunk of their share to Apple. The calculated share was estimated to be 30% of their earning.
The implemented policy included all the products. These included magazines, newspapers, videos, movies etc. Even the high stake players like Hulu Plus, Netflix, Spotify, and Rhapsody did not get any flexible walk away.
The biggest challenge was the 30% revenue that these applications had to share with Apple.
To avoid any purchases outside the Apple environment, Apple does not allow any external purchase mechanism that can grant users a subscription in Apple. Hence, there was no backdoor entry for anyone. It was clear that if these companies wanted to serve their business to the audience of the Apple environment, they have to bow down to the laws laid by Apple.
Another restriction for the application is that they can not link themselves to the Amazon website.
After facing criticism from several competitors, publishers, developers, and even service providers, Apple made changes to its policies.
The new rules allow developers and publishers to set the price of their products and services according to their convenience. However, the restriction on linking external sources within the application is still prohibited.
Apple is not forcing Amazon to sell their books in the Apple store. If Amazon decides to do so, they are allowed to charge a premium amount from the customers. It will help Amazon compensate the amount to Apple.
Another reason for the change in policy could be the Financial Times application winning an award for the best web-based application. The application can bypass the Apple AppStore and can open in a browser.
However, Financial Times will continue to host their application on the Apple platform, but they aim to direct the audience on to their browser-based web-application.
Though the FT Times new web-based application created a polarity amongst the other publishers. They have to decide their future with Apple-store.
