The era of AI-driven, privacy-first marketing

Here’s a quick review of this season’s news in MarTech/AdTech, ePrivacy, Zero-Party Data, and Competition. All four topics shape the market we work on (and hope to redefine). 

Editorial

A couple of recommended readings to get us started:

• At a time when Facebook (now Meta) is poised to enter a major fight with Microsoft and Apple for B2B metaverse dominance, this piece by Doug Antin reminds us of the power of avatars when it comes to ensuring privacy. The idea may run counter to Mark Zuckerberg’s strong belief in a social graph (an internet!) built around unique, real-world identities, and it will definitely present safety and legal challenges, but B2C Virtual Reality leaders Fortnite (Epic Games) and Roblox may be able to show the way.
• Demonopolizing the internet with interoperability: once again, interoperability is seen (this time by Cory Doctorow) as the best possible answer to the current unfair competition challenges presented by demand-driven gatekeepers (with antitrust tools, originally built around supply-side choking points, proving useless).

MarTech & AdTech

• Apple’s ATT (App Tracking Transparency) initiative has finally shown its teeth on Facebook’s (Meta) and Snapchat’s quarterly results. The inability of advertisers on these platforms to optimize their ad spend on the basis of actual conversions/sales has affected their results in proportion to their IDFA-based, cross-app tracking capabilities as well as the relative weight of performance-driven expenditure (which seems to explain Twitter’s ability to dodge the bullet). To the dismay of many analysts, Apple’s own ad platform, not subject to the same restrictions, is now commanding a greater share of the pie. 
• Despite the above, Apple’s prohibition of fingerprinting activities (also a part of App Tracking Transparency) will become much harder to enforce, requiring manual flagging on the part of app store supervisors. This will now oblige app developers to carefully ponder the risks and benefits of embedding certain SDKs within their own apps. 
• Although still remaining a refuge for performance-driven advertisers (given the above), Android has started to roll out privacy features resembling Apple’s original LAT (Limited Ad Tracking) with an opt-out tool for GAID’s (Google Advertising ID) exposure to third parties, together with a new Privacy Dashboard. This could eventually lead to a scenario that closely resembles iOS in terms of user profiling capabilities (ie, severely limited).
• The combination of anonymous, aggregated data and AI has become the most plausible alternative to the use of personal data and individual profiling in digital advertising. Both Google’s Privacy Sandbox (poised to replace third-party cookies in a few months) and Facebook’s recent attempts to replace their IDFA-powered capabilities with learnings obtained from advertiser-provided data sets fall within this growing trend.

Zero-Party Data & Customer Centricity

• The FTC is finally addressing “dark patterns” on the internet, including: deceptive sign-up tactics like unauthorized charges or impossible-to-cancel billing.
• DuckDuckGo is facing strong competition in the privacy-first search engine space. Brave launches Brave Search (ad-free for now) and Neeva, a subscription-based tool that indexes internal documents along with internet content, starts gaining traction. 
• CitizenMe raises a $2m funding round to allow consumers to take control of their personal information, and decide what data to share with companies of their choosing.

ePrivacy and regulatory impact

• Firefox joins the Global Privacy Control initiative (already in place at Brave and DuckDuckGo) shortly after California’s Attorney General confirmed that it is an effective means of exercising “do not sell” rights, thus avoiding cross-site profiling by unknown third parties. 
• Even within the FTC, data minimization starts taking shape as the best possible answer to the many legal challenges faced by the digital advertising ecosystem.
• In a sign of appreciation for the many critics of its approach to user privacy, Mark Zuckerberg released (and posed with) Facebook’s brand new “spy glasses”, featuring a double front camera and allowing anyone to film anyone else with the sole warning of a tiny led that most people will fail to recognize.
• As the Digital Services Act makes its way through the EU legislative process, various proposed amendments require a direct prohibition of behavioural programmatic advertising (or Real Time Bidding), prompting a forceful response by the IAB (Interactive Advertising Bureau). 
• The European Data Protection Board (the “EDPB”) announced a new taskforce to coordinate the response to complaints filed with several EU data protection authorities by Max Schrems’ NOYB organization with regards to cookie banners which do not provide a “reject all” option on their first layer.
• A study by Madrid’s Carlos III University reveals that “nanotargeting” is possible on Facebook (Meta): ad campaigns can be tailored to specific identified individuals. Researchers also found that such capabilities can easily involve the use of special categories of data (for which explicit content, and not just “regular” consent, is required by the GDPR).
• A case against the Irish Data Protection Commissioner for allowing Facebook (Meta) to rely on the performance of a contract for the processing of personal data –rather than consent– has made it to the Court of Justice of the EU. As argued by other supervisory authorities and Max Schrems (privacy activist behind the move), Facebook’s users are not primarily driven by a desire to discover new products or consume ads, but rather by the need to connect with their social circles and find entertainment.

Competition & digital markets

• The race for metaverse dominance has begun in full swing, with Microsoft and Facebook outlining clear plans for a rapid deployment of resources (both companies understand the consequences of playing by someone else’s rules, as is today the case in the mobile ecosystem). Facebook’s rebranding to Meta falls within this context, and it happens to provide a badly needed layer of abstraction from the neverending reputational crisis affecting its original brand. 
• Despite having fought off most charges successfully, Apple ended up paying an important price as a result of the Epic lawsuit: apps on its App Store can now rely on alternative payment methods, creating a world of opportunities for conversion optimization in the open web.
• Facebook (Meta) calls off the release of Instagram for Kids in the midst of serious accusations by a whistleblower (Frances Haugen) about its low ethics and a relenting push for growth at all costs. As it later emerged, the company is struggling to attract the younger users now defecting to Snapchat or TikTok.
• The UK Competition and Markets Authority has imposed a 50 million fine on Facebook (Meta) for its failure to disclose all required information in its acquisition of the popular animated gif sharing service, Giphy.
• The future EU Digital Markets Act (imposing heavy burdens on internet gatekeepers) provokes the first clash with US representatives: most companies covered by the set threshold are US-based.

(Photo by Kajetan Sumila on Unsplash)