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Happy New Year, <<First Name>>!

I hope you had a relaxing break. I only got a few days off, but it felt a lot longer than that, so I'm ready to get back to work!

And I'm gonna dive right in with Apple and Google. My two favourite troublemakers.

Because it's funny (not funny ha-ha, more like 'oh, look we're all screwed, LOL') how any changes they make impact our lives almost as much as changes in public policy do.

In fact, I'd say they have an even bigger impact!

Because where public policy can take years, all big tech has to do is announce a policy change and watch the world capsize in just a week.

Sometimes the changes are for the better, and sometimes... well, not.

They'll fervently tell you they're fighting for the greater good, though.

Like newly turned people's champion Sir Facebook, who rode into battle against Apple, proclaiming it was for the good of the little people.

But as Marilyn Monroe put it, "Sweetie, if you're going to be two-faced, at least make one of them pretty."

So, in the end, whatever big tech does, we're just left to scramble after as best we can.

And this year I'm sure we're going to see a lot more on this particular topic as we begin to face the realities of these changes coming into effect.

2020: The milestone year for privacy. And advertising?

Both Apple and Google have announced major changes to their policies.

Quick recap:
  • Google announced that it will stop supporting the third-party cookie by 2022,
  • and Apple is blocking advertisers from accessing user-data without explicit consent.
Both policy changes are massively disruptive to online advertising.

And both are rooted in improving online privacy.

Losing the third-party cookie has rattled the industry. And Apple's decision is almost as significant.

So significant, that even Facebook sprung into action – something neither public outcry over the blatant spreading of misinformation and hatred nor a boycott by advertisers was able to accomplish.


The new feature in iOS 14 concerns the IDFA (Identifier for Advertisers) tracking tag.

It allows apps to collect aggregated user data. 

Apple no longer shares that data with app developers or publishers – unless you give them explicit consent (much like GDPR).

IDFA is the backbone of mobile advertising on Apple's devices.

By assigning an IDFA to a device, advertisers can track user behaviour within and across different apps, deliver targeted ads and attribute conversions using the identifier.

This makes mobile advertising on iOS devices less attractive. Duh.

If you're on iOS 14, Big Sur or iPadOS 14, you'll have seen the notice showing what data an app will gather to track you, as well as the data that it may use that's linked to you before you download it.

This feature is a win for user privacy.

Because it gives you the power to know what you're signing up for beforehand.

But mobile advertisers are worried – and rightly so – that more users will opt-out of data sharing which makes behavioural targeting and attribution impossible.

And that's bad news for the millions of app developers that rely on ad revenue since the loss of targeted ads makes mobile ad inventory less attractive.

On one hand, this move from Apple may further clean up inventory on the App Store.

On the other, it might kill many small developers who are unable to pivot to a subscription model.

Not to mention that more subscription-based apps mean more revenue for Apple.

And this might just be the push they need to get more developers to switch to Apple's SKAdNetwork.

This conflict of interest has already caused Apple to reevaluate how much commission it charges from the App Store. 

As Adtech vendors are offering workarounds and advertisers are looking to CTV.

Trade Desk is pushing its UID 2.0 initiative as a possible solution.

But the world of adtech is littered with countless possible solutions that never caught on.

So despite support from Criteo, Nielsen and LiveRamp advertisers are worried about adoption and scalability of UID 2.0.

For advertisers, buying ads without targeting or attribution makes little sense.

So, many are looking to CTV while the mobile advertising industry works on a solution.

But more user privacy is always bad for Facebook.

The hit to Facebook Network's ad revenue could be as much as $1 billion.

Facebook has already hinted towards ceasing support for Mobile App Optimisation through the Facebook Network on iOS devices.

And starting in 2021 Facebook will exclusively use bidding for ad delivery on iOS.

So, Sir Facebook recently launched a campaign against Apple.

Taking out a full-page ad to champion the cause of small businesses.

They're lamenting, that without retargeting, small businesses will be unable to reach their communities – and that could result in a 60% drop in sales for SMBs overall.

There's a grain of truth there.

But when has Facebook ever done anything for the greater good?

And why start now?

Relentless data gathering is the backbone of their business.

And since Facebook's apps gather much more user data than other similar apps, they're rightfully worried that users opting out will make the platform less attractive to advertisers.

If they were really interested in supporting SMBs, they'd start with something, like say, improving organic reach and support for small advertisers.

Now Apple is offering its controversial SKAdNetwork as a replacement for IDFA.

And Apple has done a brilliant job of positioning itself as the tech giant that doesn't compromise on user privacy – not unless it's good for business.

Your Apple device still collects the following details on your behaviour and usage:
  • the books you read,
  • the music you listen to,
  • the videos you stream,
  • the apps you download, 
  • the things you search for,
  • the news you read, and
  • the things you buy.
And Apple continues to use it to deliver better in-app experience and content across its ecosystem.

However, other publishers and app developers don't get to use that data for the same purpose as Apple without your consent. 

The SKAdNetwork will not just replace the IDFA, but bring back behavioural targeting too.

For publishers and adtech vendors using Apple's SKAdNetwork is controversial in the same way as switching to Google's Privacy Sandbox.

They're reluctant to have Apple become the sole gatekeeper of all user data.

Sure, publishers and adtech vendors get access to the data, but only by going through Apple.

In the short term, in-app and programmatic advertising on iOS devices is taking a hit.

And businesses of all sizes will see poor ad performance across iOS devices. 

At least until a new identity solution becomes widely adopted.

This gives us yet another reason to start building first-party data, investing in SEO, diversifying, and trying emerging mediums such as SMS.

The march of evolution in advertising is inevitable, and in 2021 you can expect:
  • adtech vendors and publishers offering ad-products built on aggregated first-party data,
  • measurability to be based on incrementality vs clicks and brands, and
  • brands being more proactive in educating users on privacy and data usage.
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In case you missed:

Is there a silver lining to 2020?

2020 tested business models and long-held beliefs about how selling is done.

Some businesses were clearly not prepared, while others managed to hold on for dear life.

The businesses that came out swinging built resilience, character, courage, cleverness, commitment, and an eagerness to engage with the unclear and indefinite.

Those qualities are going to be in big demand and it's too soon to file them away with the end of 2020.

Toggling between relaxing and reinforcing restrictions means businesses and consumers co-create the new normal

The great flight to digital, the emergence of the home as a multifunctional hub, and an overall shifting of focus towards value the humanisation of experiences will influence behaviour and decisionmaking long after the pandemic.

Marketers need to think differently about what buyers (people and businesses alike) will need and best respond to in the months ahead.

Chasing shiny new things might make you feel like you're doing something brave and different, but especially now you need to put your faith in time-honoured marketing truths that have stood the test of time, along with a healthy dose of resourcefulness.

Facebook IQ sees potential staying power for pandemic-induced behaviour shifts

Facial recognition: just like on Facebook but IRL

The use of facial recognition is growing, and in some fields has even become integral.

In fields like retail, it's starting to be rolled out with high hopes that staff will soon be able to recommend products for you based on your mood.

But the BLM protests made us aware of its impact and highlighted our complicated relationship with it.

Tech providers are betting the public will get more comfortable with the use of biometrics and that it'll soon be an organic part of digital life.

It took millennials turning 30 before legislation started catching up with data privacy (yes, on behalf of the group, I'm taking credit for this) and 2020 was a controversial year for facial recognition.

Now's the time to make sure this doesn't turn into another ambiguous tech that knows more about us than we know about it.

+ No laughs. No Pay. How a comedy club in Barcelona used facial recognition to set its ticket price and attendance rose by 35%.

An unexpected gift to the little guys from Google?

2020 was a busy year for Google.

Our beloved search giant launched a number of new products and got tangled in just as many lawsuits.

In the meantime, marketers woke up to the incredible power of search data.

Oh, we woke now.

So woke, in fact, that Google snuck in a core algorithm update.

It was the biggest winners of 2020 – Amazon, Pinterest, CDC, Overstock, CNN, The New York Times among others – that got a dramatic reversal in visibility just days after the update.

Maybe Google decided it was time to give some of the smaller players a chance to compete against the big guys?

The best we can do is understand what has changed, who gained and who lost.

What's retail gonna be like post lockdown?

The prolonged lockdown reinforced new behaviours and created pent-up demand for things that were put on pause.

Now we look to China – the first country to enter and exit lockdown – to learn what consumer behaviour holds for us in the future.

Retail was boosted right after the lockdown but consumers still preferred e-commerce over visiting malls.

Mall foot traffic remained low, but conversion rates went up.

That people prefer to visit a retailer for certain products and services is a crucial insight into the changing role of brick and mortar retail post-pandemic.

Fashion and luxury brands saw the highest growth rate in China, but overall, the retail market in China didn't outperform the US despite industry expectations.
 
These 5 articles are from my daily digest where I curate the best content covering everything from emerging trends in marketing, consumer behaviour, retail, public policy, strategy and technology. You can sign up here.

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 “We need to stop interrupting what people are interested in and be what people are interested in.”

- Craig Davis, former Chief Creative Officer at J. Walter Thompson

Until next week,
Aliyar

PS. Are we connected on LinkedIn? No? Let's remedy that, shall we?
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Thanks for reading and sharing! BR, Aliyar.
Had so many espresso shots you can't remember why I'm sending you these emails? You're receiving these email because you opted in (on my website aliyarhussain.com) to get this weekly espresso shot of knowledge, confidence and inspiration to your inbox. That was a good move, but if you want to take a bad turn down a dark alley, you can easily update your preferences using the links below. | Aliyar Hussain, Rysäkuja 3 a 5, Helsinki 00980, Finland

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