Google has announced plans to overhaul tracking on Android devices — the mobile operating system used by 70% of the world.
That’s one small step for user privacy, and one large push back for digital advertisers.
Meta’s sweating: Last April, Apple rolled out a software update that (for the first time) asked for permission before allowing an app to track your behaviour. The move curbed the amount of data that app developers could collect and sell to advertisers.
The ~75% of users who’ve opted out of tracking have cut into the bottom line at companies like Meta, which depend on tracking users to serve up personalized ads.
What happened: Google will replace its current ID system — which builds a profile around your interests and activities — with one that limits data-sharing and selling with third parties.
A Google exec emphasized the goal of finding a balance between a more private option for users while allowing developers to continue making ad revenue.
But in contrast to Apple, Google will work with app developers and digital advertisers on the tweaks — like crafting new methods to target ads to users and gauging the effectiveness of ad campaigns — over two years before making any drastic changes.
- Taking its sweet time is in Google’s best interest, as the company heavily relies on advertisers — its parent company Alphabet made US$61 billion in ad revenue in Q4 2021 alone, up 33% from the year before.
- Comparatively, Apple blindsided the ad industry by giving them under a year to prepare for the changes.
Why it matters: Google’s changes mark yet another major upheaval to the ~$100 billion and fast-growing global mobile ad market. Improving privacy features and giving users more control over their data — a growing demand from users, regulators and politicians — will come at a cost for companies that make $$$ off digital ads.