Google Joins Apple to Opt-out of Mobile Advertising IDs
Android 12 makes interest-based advertising obsolete to set off an irreversible collapse in Facebook’s ad ecosystem
Facebook has a market evaluation of over 930 billion dollars today. That’s billion with a B — and just shy of becoming a trillion-dollar company.
Through shrewd acquisitions, blatantly copying the exclusivity of rivals (read: Snapchat, TikTok), Facebook has managed to become an integral part of our lives in less than a decade.
We all use their free services like Instagram and WhatsApp almost every day. Even if you try staying away from the Facebook family of apps — be it by uninstalling, deactivating your profile, the company still knows who you are and continues to build a shadow profile.
Some might wonder how’s that possible? Especially since they’re not on the app. Others’ would ponder over Facebook’s evergrowing market valuation and how it’s even justified? More so, since the social media giant doesn’t charge a penny for its products.
Facebook Created a Billion-Dollar Ad Business from Personalised Ads
A few years ago in an anti-trust court hearing, Mark Zuckerberg had put Facebook’s business revenue mysteries to rest.
“Senator, We Run Ads” was the iconic response from Facebook’s CEO back then.
And that’s how Facebook still manages to stay free of cost today. It’s also the same reason why the company manages to track you even if you aren’t using their apps.
For instance, if you’ve uploaded a photo to Facebook, the company can figure the metadata. No wonder, my newsfeed was flooded with weight gain product ads when I was thin. And beard-grooming products during lockdowns.
Any time you walk into a mall or supermarket, there’s a good chance your newsfeed would be swamped with a bunch of ads about good deals nearby.
This is no coincidence. Facebook was secretly tracking your location to run targeted campaigns. Despite enhanced location permissions over the years, Facebook always had a way around.
Bluetooth tracking allows fetching nearby locations — which is what social network advertisers use to identify people around and deduce relationships among people.
OK, even if you do ditch Bluetooth and delete the Facebook family of apps, they could still track your fingerprints and understand your behavior through deep links.
For those who’re new, deep links are web URLs that help redirect mobile users to the app directly instead of a website. Most of the third-party apps today integrate Facebook SDK to add deep links. So, Facebook could easily collect your Advertiser ID every time you clicked a link to install a new app.
As a result, they could easily match you with advertisers, who would then run targeted campaigns on you, your Facebook friends to entice more ad impressions.
Howsoever cliche it sounds, when a service is free of cost, you’d know whose the product.
Facebook, the leader of free services has managed to collect terabytes of first-party data from mobile and web users. And subsequently, they became the king of personalized ads.
Understandably, marketing agencies have been dedicating a part of their budget towards advertisers to help increase their exposure.
Over the years, Facebook’s Audience Network has become the leading force of matching marketers with consumers. This not only helped Facebook create a billion-dollar business out of in-app ads but also keep its services free of cost.
However, technology has started to undergo enhancements in the last few years. Google and Apple’s focus on privacy has ensured Facebook’s road to a trillion won’t be a cakewalk. Facebook won’t stay a trillion-dollar business for long.
And the point of genesis is the same: Advertisements.
Android and iOS occupy the majority share of the mobile operating systems. Together, Google and Apple have eliminated all ways to track a user’s advertisement ID and limit cross-app tracking.
Apple’s iOS 14 App Tracking Transparency Drew the First Blood in the Ad-Wars
Facebook and Apple have a strained history that encompasses a decade. But, it’s the iPhone maker’s recent push towards privacy that’s beefed up their feud.
Apple had first embarrassed Facebook by including a Bluetooth permission popup when users launch the app for the first time.
Limiting background location tracking and giving Apple users a choice to share approximate location tracking only rubbed more salt in the wounds of Facebook.
Yet, it was the iOS 14 update that freaked the hell out of Facebook.
For the uninitiated, Apple released a new opt-in ad tracking popup that lets the user decide whether to give apps access to their device-specific advertising ID (IDFA) or not.
Unanimously, users would opt out of cross-app tracking by choosing “Ask App Not To Track” thereby limiting Facebook’s ability to track our behavior, reducing their reach, and ways of monetization on the smartphone.
Facebook and advertisers' loud outcry partially succeeded in convincing Apple to postpone that privacy update. But despite best efforts, iOS 14.5 finally launched App Tracking Transparency and got a positive response from the iPhone users.
Google Introduces Limited Ad Tracking on Android 12 to Stall Facebook’s Growth
Last year, I poured my thoughts on the impact Apple’s iOS 14 privacy update would have on the whole smartphone ecosystem.
My prediction of Facebook being the biggest loser was accurate. I also thought Google would roll out a similar feature with the Android 12 this year.
Android 12 brought the biggest privacy changes in recent years. Most were analogous to iOS 14's privacy features with an exception in Bluetooth permission. By removing access to location services from Bluetooth, Google managed to crater Facebook’s location-based advertisement business.
However, a feature like App Tracking Transparency was missing from Google I/O 2021. This was a bummer for privacy advocates as Android still holds a larger market share in the smartphone ecosystem.
To our relief, the disappointment of anti-ad tracking features was short-lived.
Only yesterday, Google announced its plans to make advertising ID an opt-out feature. Here’s an excerpt from their support page:
Starting in late 2021, when a user opts out of interest-based advertising or ads personalization, the advertising identifier will not be available. You will receive a string of zeros in place of the identifier.
To put it straight, Google’s advertising ID (GAID) can no longer be accessed by advertisers if the user disables it from their settings.
GAID is similar to Apple’s IDFA in the aspect that both are used to monetize off users’ interests.
Now that Google is pulling the plug by making GAID almost obsolete, Facebook is about to stare at a bigger loss. If their loss from iOS 14 was in the range of $80bn, Android the more dominant platform will only further ensure that Facebook’s recovery won’t easy.
Though it’s good to know that Google’s opt-out ad-tracking popup isn’t on the forefront like in iOS. Instead, it’s buried deep in the Google Play Service settings — which could be difficult for the non-tech savvy user to find out.
Regardless, the move by the search engine giant is surprising. Much like Facebook, advertisements are a major chunk of Google’s business as well.
Maybe, they don’t mind losing out on ads given they already have so much first-party data from Android and Google’s suite of apps?
Google and Apple’s Moves Will Make Facebook Feel the Squeeze
When Facebook launched an all-out battle against Apple last year, little did they know that the war would be two-front.
Clearly, this chain of events is about to trigger an irreversible slump in Facebook’s advertisement business — making their ambitions of becoming the fastest trillion-dollar tech firm a far-fetched dream.
All is not over for Facebook though. They have AR/VR social media plans in the pipeline.
However, if Mark Zuckerberg goes back on the drawing board to figure what went wrong, he’ll probably realize that data breaches and privacy awareness aren’t the causes of an impending downfall.
Instead, a lack of effort in developing their own operating system a decade ago might be Facebook’s biggest regret. And this has come back to bite them today.
In the end, the battle is about privacy, but it’s also about collecting first-party data. Facebook has a lot, but they’re heavily reliant on Google and Apple — both of whom own the popular operating systems and browsers, which gives them leverage.
Edits: As pointed by one of the readers, Google’s Advertising ID is opt-out whereas Apple had it as an opt-in feature.