Economist Writing Every Day

Ben Lange, a business student at Samford, writes:

In January of this year, Apple made a big announcement. It wasn’t about a new iPhone. Apple announced that it will soon release an update to their software that allows users to choose whether they give permissions to apps such as Facebook to track their browsing history on other companies’ apps and websites.(WSJ) This has implications for data usage and availability in advertising. As technology has advanced, regulations surrounding exactly what a company is allowed to do with your data has  stayed relatively stagnant, especially for smartphones. Companies such as Facebook and Twitter are allowed to monitor your searches not only on their apps, but also on your phone browser and other apps.

This allows them to collect usage and search data which they then store for their own use. They develop algorithms based on this data that they can use to predict what items you might want to buy, what advertisements you want to see, and many other things. While this may be a wonderful display of predictive analytics, not everyone feels comfortable being monitored this closely. However, many companies have built their business structure around the easy collection of data from their users’ devices. It is often said that if you are not paying for the product, you are the product, and that is true in digital advertising. In 2019, Facebook made 98% of their revenue- $69.7 billion– from advertising. The reason they were able to do this isn’t because they have prime billboard real estate, at least not in the traditional sense. They have something even more influential than that- unlimited access to you. They know what you search for and are able to sell this information to other companies, as well as the right to the digital billboards we all hold six inches from our faces for hours a day. Apple’s new software has the potential to cripple technology giants like Facebook and Twitter as well as change the way we view data collection. Once this update is released, social media and search companies may change their profit structure. Some might consider paying users for the right to track their data in hopes that they will then be able to sell that data for a profit. Others might consider offering a premium version of their app that users have to pay for unless they agree to be tracked. The future of advertising on the world’s tiniest billboards will be different. Maybe one day we won’t have to worry about the things we think about popping up in our feeds. Some people may be fine with that, but Apple thinks it should be up to the users to decide.