Open clouds vs the big three

Yes, the major public clouds offer a lot. But what you may not know are the limitations, and how open clouds make the difference.

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When 98.5% of your business is based on advertising and a genuine threat comes from another business that isn’t a direct competitor of yours, you’d probably consider that a crisis. In response to this crisis, Facebook took out a full-page ad in the New York Times.

It’s not just Facebook that made noise and tried to out-engineer Apple’s guidelines. A coalition of major Chinese developers attempted to fingerprint devices via the CAID (Chinese Advertising Identifier), but Apple responded with a fast and detailed slap down of the attempt.

Facebook’s full-page ad and larger PR campaign was more subtle than the CAID, but it’s a move that has been seen as desperate, particularly because of the primary argument that they were standing up to Apple “for small businesses everywhere,” when, in fact, the biggest impact will be their own bottom line. For them, nearly billions of dollars is at stake.

And it’s all because of one company and their decision to give consumers a choice. Apple claims that users should know when their data is being collected and shared across other apps and websites, and they should have the choice to allow that or not.

“App Tracking Transparency in iOS 14 does not require Facebook to change its approach to tracking users and creating targeted advertising, it simply requires that they give users a choice,” Apple said in a statement.

What Apple is doing here is calling out the fact that, for lack of federal government regulation that protects consumers from what they believe to be a violation of privacy, Apple will go ahead and do it for them using the sheer power and ubiquity of its own platform.

But is Apple’s move really about protecting consumers?

Sure, by touting “Privacy. That’s iPhone,” in a massive ad campaign and hoisting it up on a pedestal like they would a new piece of hardware, it can feel like privacy is their product.

Apple has been using privacy as a differentiating factor in its market positioning for the past decade. Now, as part of that, they are hawking consumer choice. But ultimately what this comes down to is that Apple has a different vision of the future of the internet.

For Apple, their vision is of a clean, curated web where content — at least the content that they are responsible for distributing — is from trusted sources, high-quality and is primarily paid for up-front or through subscriptions, not through advertising.

This isn’t new news. Anyone who follows Apple could see this coming. In 2015, Apple Music became a subscription, then we saw streaming video (Apple TV+) and gaming (Arcade) added to the mix. And now, of course, there’s the bundle option of Apple One.

So it’s not surprising that analysts believe this is the road they are heading down. The fast pace of technical innovation means consumers want to own the latest and greatest, and subscriptions offer flexibility to upgrade at a lower upfront cost. Additionally, Millennials and Gen Z tend to have a rent versus buy mentality, which applies not just to cars and homes but music and video streaming.

It’s safe to say that Apple stands alone when it comes to their vision of the internet

It’s not just about philosophy, of course. Apple can say that they believe in privacy, a clean internet where you pay for premium content via subscriptions. But what it comes down to is they sell hardware, not software.

Facebook and Google, on the other hand, are software companies. So of course they believe that the internet — and everything that lives on and around it, including content in mobile apps — should be free. For them, advertising is the “ultimate tax” you pay to access content.

And, while you previously paid tax solely with your attention, it’s now paid with data. Thanks to documentaries like The Social Dilemma, as well as the massive increase in malware/spyware on the internet and cybersecurity hacks, consumers are becoming more aware of how deep that cost really is.

In many ways, we are going back to the early days of the web where context was king and media was valued when it came from a trustworthy source, but in that world consumers need to pay up…with money.

So — when Apple asks you if you want to be tracked across apps and websites, what they are really asking you is “How do you want to pay for your content?”

We’re already seeing verticalization from ad networks and MMPs in an effort to combine information under the umbrella of “first party data” so as to not qualify their behavior as tracking under Apple’s App Tracking Transparency (ATT) framework. The other question is whether the CAID will see widespread enough adoption.

Alasdair Pressney is Director of Product Strategy – Advertiser Products at AdColony.

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