June 24, 2020 · 2:41 pm
Sometimes I feel that I use this space to relay only bad news. I rage about lousy customer service and vent about idiocy in marketing. Well, not today. Nope. I have some good news, at least from a consumer perspective. Frankly, from a marketer and application developer perspective, it sucks, but that’s life, I guess.
Apple released the details about the latest version of iOS yesterday. I’m not an Apple fanboy and I don’t own an iPhone. However, I think this announcement is a big step forward in many ways. You see, this new version of iOS will offer new privacy features, including one that could make it harder for ad-tech companies to track users.
When an app that’s installed on the phone wants to track them for ad purposes, the phone will let the user know and will ask people to either allow or prohibit tracking by that app. If you choose not to have an app track you, the system won’t let the app grab the identifier for advertising (IDFA) — an alphanumeric string that allows developers to track mobile users across different apps. My Android phone has something similar but it’s really a binary yes/no choice for all apps and not set at the app level. What Apple is doing is a step forward in improving our privacy.
Needless to say, the Network Advertising Initiative criticized Apple’s move. They say that it will make life harder for app developers since it will be harder to make money via ads. They say this could lead to developers having to charge for apps or for in-app content. I realize I might not be typical, but I do pay for apps that I find useful, especially if that removes the advertising. A few bucks a year for something I regularly use is, in my way of thinking, a fair exchange of value. Tracking me without my permission and selling the data is not.
Apple did something similar to this in their Safari browser a year ago. You would expect Apple to lead the change on privacy with respect to ads because unlike Google or Microsoft, their business isn’t based in the advertising world. Their hardware isn’t a secondary line as it is with others. Is this going to have others doing the same? Maybe not, but since third-party cookies have disappeared and now tracking is more difficult on a significant portion of the installed mobile base, other changes in how privacy in the ad business works are sure to follow. Stay tuned!
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June 7, 2019 · 5:34 pm
Foodie Friday! I installed a couple of the food-delivery apps on my smartphone this week. Some of my favorite local places use the delivery services to expand their business and I thought having the ability to order in might be a nice option. Of course, that got me thinking about what exactly the restaurants got besides the additional order (at a lower price when you factor in the service’s cut but no service cost). The answer, as it is with almost everything today, should have been data but as it turns out, not so much.
The reality is that the delivery apps hang on to the data. They “own” the customer, not the restaurant, and that’s a problem, or it should be. Restaurants are giving up the direct connection to their customer by not getting that data and they have no way to combine it with their offline, real-world data gathered when I actually show up to eat as well as with the data they might get from a reservation service such as Open Table.
Ownership of the customer is an enormous issue no matter what business you’re in. For example, your car spits out reams of data about your location, your driving habits, and many other things. How many? A report by Consumer Reports said that “There are more than 200 data points in cars today, with at least 140 viable business uses.” Who owns the data and, therefore, the customer? The dealer who sold you the car? The manufacturer? I, of course, think the right answer is that YOU own the data until you give it to someone for a specific purpose.
Think about how many things around you gather data these days. Your TV, refrigerator, heck, even your toothbrush might be collecting information about you and your habits. Who owns you as a customer? I bought my TCL TV through Best Buy. It has Roku built in. Who “owns” me? What’s being shared?
It’s a question you need to ask as a business person when you partner or work with a third party. I think customer ownership is a fundamental issue and it’s only going to become more important. Of course, as a consumer, you ought to be every bit as concerned but we’ve talked about privacy a lot here so not today (84 posts and counting in the last 11 years!).
I really don’t care much about DoorDash or GrubHub. Without the restaurants they serve, I wouldn’t ever install or use them. I’m not their customer in any real sense – they provide a nice service but it’s the food I’m after, right? So why do they think they have a right to own me? Are you asking that question at all? Maybe you should!
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June 6, 2018 · 11:50 am
When I was a lad several decades ago, many Americans did their shopping at Sears and took their pictures with Kodak film (I can explain “film” to you youngsters if need be). More recently, my kids might have shopped at American Apparel or Claire’s. What all of those formerly huge companies have in common is that they are all nearly dead. The reasons for that range from bad management to dumb financial deals to changing tastes to the digital revolution. In every case, however, I think there is a common thread of a failure to understand their customers in the context of the customers’ changing world.
We have something similar going on in my mind with Facebook. It’s huge and seems invulnerable but one might have said the same thing about Kodak or Sears 50 years ago. First, think about how the world is changing for their customers. Privacy has moved from something that digital folk like me were babbling about many years ago to something that is on everyone’s mind. In an April survey of 1,051 US adult internet users by Janrain, most respondents said they are not in favor of websites or apps using what they learn about them online to target ads. In fact, 70% of them want some very restrictive laws, similar to the E.U.’s GDPR, passed here. I don’t think there is any doubt that a tech backlash is going on and the more consumers and lawmakers find out about the sloppy (at best), invasive, and maybe criminal (at worst) data use by large tech companies, the greater that backlash is going to become.
Facebook’s entire business is built around invading your privacy. Two points from eMarketer:
More people are becoming suspicious of sharing data through third parties. In a March 2018 survey from Raymond James, more than eight in 10 US internet users said they were at least somewhat concerned about how their personal data is being used on Facebook. Similarly, in a Gallup survey of 785 Facebook users in April 2018, 43% said they were very concerned about invasion of privacy. That’s an increase of 30% in 2011.
What has resulted is that people, especially young people, are sharing less content. The entire reason Facebook is valuable for most people is that content that their friends, classmates, and family post. It’s the network effect – that value of the network relates to the number of people on that network.
I’m not shorting Facebook stock today but I’m not so sure that unless they get their privacy house in order that won’t be a bad play down the road. Less content means fewer active users which leads to less revenue. Will they all move to Instagram (a Facebook company)? Maybe, but probably not since that’s not what’s occurring now. As each day brings a new headline involving a bad actor and data, another nail gets pounded into the coffins of companies that don’t respect their customers’ privacy and wishes. Privacy and data use are no longer just food for geek chats. They’re on the front page. How long can Facebook or any company last if they don’t figure this out? Longer than Sears or Kodak?
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Filed under Consulting, digital media, Reality checks
Tagged as Business and Economy, Business model, Data collection, data usage, Digital marketing, digital media, Privacy, Reality checks, Strategic management