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.
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.
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.”
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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