Facebook is ‘misleading’ you to believe that Apple’s privacy policy is bad for the internet: Report

2021-02-04 06:20:36

In the ‘free’ internet economy, you are the product. This is already known. While you get to enjoy free online services, the companies that provide these services earn tons of money by showing you ads and bartering your personal information. This model has worked perfectly for decades and it may work like this going forward too. But is Apple doing something for end-users which is becoming a threat to this free online economy, if Facebook is to be believed.
As you may be already aware, Apple will be rolling out a major privacy feature in iOS 14.5. Apple’s new privacy policy will require developers to ask for permission before they can track the users to serve personalised ads.
Remember the newspaper ads that Facebook had published recently to blame Apple that online privacy would mean bad for small internet businesses? It turns out that Facebook may actually be misleading users by providing scary numbers, if a new report by the Harvard Business Review is to be considered.

The report said, “Facebook’s central claim is that small businesses will lose revenues if they can’t use personalized ads. “Without personalized ads,” the company says in its ads and on its website, “Facebook data shows that the average small business advertiser stands to see a cut of over 60% in their sales for every dollar they spend.” It’s an eye-popping figure, and one that suggests that Apple’s pro-privacy policy is poised to deal a devastating blow to small businesses.”
Countering the claim by Facebook, the report by Harvard Business Review said, “To properly evaluate this claim, you first need to understand the popular metric that Facebook used here to quantify advertising success: return on ad spend, or ROAS. The metric indicates the amount of revenues associated with advertising — but it does not indicate the amount of revenues caused by advertising.”
The reason as to why the new privacy policy is sticking out like a sore thumb and worrying companies like Facebook, which rely mostly on ad networks, is due to the fact that Apple is giving end users more power to control their online privacy. Now, we all know that ads personalised and the ads that you see online are based on what you browse online.
But what most internet users don’t understand is how these ads are personalised in the first place. The ad networks create a digital profile of users and track them across different apps, websites, browsers, video platforms to ultimately serve effective ads.
“If the company targets its advertisements to those customers who are expected to spend a lot, each dollar spent on advertising will be associated with high revenues. That’s great — the company has achieved a high return on ad spend. But here’s the thing: These customers would have generated high revenues anyway. That’s why they were targeted in the first place. So it would be a mistake to conclude that these customers spent more because of the personalized ads,” explained the report.
Apple is not against this ad model or tracking, Apple simply wants users to know that they are being tracked and whether or not they would actually want to be tracked. With iOS 14.5 update, you will get an option to prevent apps from tracking you without your permission. And Facebook is simply against Apple for giving users the choice as to whether or not they would want to get tracked.
Interestingly, the Harvard Business Review believes that small businesses may be affected by Apple’s new policy changes and Facebook can feel entitled to stand up for these small businesses. But the report summarised, “disinformation about advertising effectiveness isn’t the way to do that.”

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