Apple has a lot of knowledge regarding its users, which it uses to improve its services and offerings, including names, addresses, locations and purchase histories. But what it doesn’t do with that data is share it with advertisers very freely. That makes Madison Avenue very mad, according to a new AdAge article detailing why Apple, and Amazon (which operates in a similar manner) aren’t having an easy time of building their respective advertising businesses.
Apple might come out ahead of its competitors on data, if it would share.
That’s a telling quote from the piece, which refers to the quality of Apple’s information, which is “one of the best” according to a former Apple software manager and one of the key architects of iAd’s data-measurement platform. But what it reveals to its advertising partner is next to nil; rather than offering a cookie-based ad-tracking and targeting mechanism, it essentially requires partners to tell it what kind of audience it needs to reach, and then trust that Apple will handle the rest, AdAge says. And it’s well worth noting that Apple prioritizes customer privacy here over a big potential upside in ad revenue.
As Apple itself notes on its official advertising page, advertising partners get access to analytics and performance reporting, as well as customized campaign creation with either automatic or manual targeting options, which include factors like geography, gender, age and specific user preferences. But what it doesn’t do is hand over the keys to all that data and let advertisers plug into it directly with their own data-mining and targeting software. That’s not standard for the ad industry and that’s likely the reason a few Madison Avenue feathers are ruffled over their approach.
Of course, Apple’s approach is in keeping with its overall goal of maintaining customer satisfaction. Happy customers are customers who know their sensitive data is protected and used responsibly. The iAd logic is clear: Apple offers to drive engagement, as well as provide granular reporting and easy campaign tweaks to capture a better rate of return on investment, but it isn’t willing to draw back the curtain to make that happen (nor is that even required, the company would likely argue).
Apple has caused discomfort before in an established industry in the process of maintaining its relationship with its users intact: When it rolled out the iPhone, carriers had to give up their role as an intermediary between phone manufacturer and end user, as Apple refused to allow the kind of bloatware and service/goods delivery portals that had provided revenue streams to carriers for years. This is a similar reimagining of an established way of doing business, but one that I’d argue will ultimately prove just as beneficial for the average consumer.
Advertisers, too, seem to be willing to admit the value of Apple’s system. A number of top advertisers are on board with the platform, after all, and some have been since the start. The platform has a reach of over 600 million users worldwide, with unique advantages in terms of audience segmentation. Just like with carriers, the upside is too big to ignore, and that could ultimately help contribute to an industry shift.