In an exclusive interview with Performance Marketing World, Mendelsohn discusses the evolving ecosystem of digital advertising and says “the entire industry is facing really big shifts around privacy and the way businesses are able to target and reach customers. This has been driven by regulation and changes in business environments - such as Apple - but also because of people’s desires for privacy as well.”
Her comments point to the impending changes that will come with Apple’s rollout of iOS 14.5 - a software update that will require all apps in the App Store to show a prompt for users to opt-in to tracking.
An article on Facebook’s Business Help Centre reads: “Businesses that advertise mobile apps, as well as those that optimise, target and report on web conversion events from any of our business tools will be affected.
“Apple's policy will prohibit certain data collection and sharing unless people opt-in to tracking on iOS 14 devices via the prompt. As more people opt-out of tracking on iOS 14 devices, ads personalisation and performance reporting will be limited for both app and web conversion events.”
Facebook’s Founder & CEO, Mark Zuckerberg, has been very vocal about this issue. At the beginning of the year, during the opening remarks of the company’s fourth quarter earnings call he said: “Apple may say they’re doing this to help people but the moves clearly track their competitor interests. We and others are going to be up against this for the foreseeable future.”
Nevertheless, as Mendelsohn mentions, the shifts in privacy and targeting are also being driven by consumers’ desires. But, she explains that these desires stem from a lack of awareness around how digital marketing actually works. “This leads to confusion. This leads to people not feeling in control of their experience and somehow feeling that they are being taken advantage of.”
And so, she says: “The whole ecosystem, everybody that’s working in advertising, has really got an opportunity - and I’d almost go as far to say a responsibility - to actually educate people on how digital advertising works and why it’s valuable.”
Mendelsohn believes that personalised targeted ads should be regarded as valuable for all those involved, be it the consumer, the advertiser or the platform. When done right; consumers will be interested in the topical and relevant things presented to them while businesses will be getting in front of new, hard-to-reach customers that want to buy from them. But teaching the masses the value of good digital advertising isn’t enough.
Because, according to Mendelsohn, “we have also seen over time that people’s expectations around privacy have changed. And so that’s why I think marketers need to embrace new technology, but also use less data, in order to achieve what I would call the ‘you get me’ feeling, which both people and businesses value.”
That "you get me" feeling is something Mark Lollback, the former CEO of GroupM in Australia & New Zealand, also advocates, whilst also warning against the opposite.
Mendelsohn continues: “We believe that better rules and regulations are needed. But we also think the model is worth preserving and protecting because it’s really important, especially now, as businesses are struggling to navigate the pandemic.”
And for many the debate has been very polarised - you either have targeted ads or you have data protection. But Mendelsohn doesn’t think it’s an "either-or" situation. She believes “privacy and personalisation actually can go hand-in-hand, they are not a zero-sum game”.
But how will Facebook navigate these restrictions in a way that still delivers results?
“From a Facebook perspective, protecting the privacy and security of people’s data is fundamental to how our business works,” says Mendelsohn. “So our focus is around building privacy-enhancing technologies which allow us to provide personalised advertising whilst processing less personal data.
“This is technology that is based on advanced statistical techniques that really minimise the data that we collect, process and share. It helps protect data at the different stages of the data lifecycle.
“Now we’re at the early stages of this investment, and we’re continuing to explore it, but what we are looking to get towards is how we might implement Aggregated Event Measurement, which limits access to the individually identifiable information that we process. This will lead to an approach almost known as Federated Learning, which is designed to keep personalised data localised on a person’s device.”
In fact, Federated Learning is Google’s strategy to surviving a post-third-party cookie world.
Chetna Bindra, Group Product Manager - User Trust & Privacy at Google, writes in their Ads & Commerce Blog: “Federated Learning of Cohorts (FLoC) proposes a new way for businesses to reach people with relevant content and ads by clustering large groups of people with similar interests. This approach effectively hides individuals ‘in the crowd’ and uses on-device processing to keep a person’s web history private on the browser.”
And it would seem, encouragingly for Facebook, Google and performance marketers across the globe, that this will work because initial tests have shown very positive results.
As outlined by Bindra: “By creating simulations based on the principles defined in Chrome’s FLoC proposal, Google’s ads teams have tested this privacy-first alternative to third-party cookies. Results indicate that when it comes to generating interest-based audiences, FLoC can provide an effective replacement signal for third-party cookies.
“Our tests of FLoC to reach in-market and affinity Google Audiences show that advertisers can expect to see at least 95% of the conversions per dollar spent when compared to cookie-based advertising.”
However, she does warn: “The specific result depends on the strength of the clustering algorithm that FLoC uses and the type of audience being reached.”
Nevertheless, it would seem that despite Apple’s iOS 14.5 update and the death of the third-party cookie, both personalisation and privacy will be able to work in tandem and targeted ads will be able to live on.