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Facebook vs. Apple and the “Death of Retargeting”

You know how in most “Versus” movies these days, the two big names that are versus-ing each other usually end up teaming up to fight a mutual enemy?

This story isn’t going to end that way.

Two tech titans, Apple and Facebook, are battling right now (but thankfully not destroying buildings with eye lasers or anything like that). It would be very easy to get too detailed and lost in the weeds here, so let’s try to avoid that. The very summarized version of this fight is this: Facebook (and others) track what users do. Which apps they open, what websites they visit, what they purchase and so on. Users could turn that off on an iPhone, but doing so was a pretty convoluted process. Apple has switched things around – now users will be prompted as to whether they want to allow that tracking or not, for each app they use.

Facebook is not amused. They are even considering an antitrust lawsuit against Apple. Their response is lengthy, and can be read here: https://www.facebook.com/business/news/ios-14-apple-privacy-update-impacts-small-business-ads. To summarize it, they feel that Apple’s requirement of a prompt is unfair, hypocritical (apps made by Apple don’t require the prompt), and is about profit, not privacy. The next day, Tim Cook (CEO of Apple) tweeted:

Whoa, Tim. Them’s fightin’ words.

Ok, so that lays out the combatants and what they are fighting about. But what does it mean for advertisers, really? The big takeaway is this: You will need the permission of a user to display targeted ads based on that user’s data that was collected from other apps and websites. A big part of this is retargeting.

What is retargeting? The easiest way to explain retargeting is to give a real-world example, using our good friend Imaginary Bob. Bob visited a car dealer’s website on Thursday afternoon. By Thursday evening, Bob was seeing advertisements for that car dealer (and even some of the exact vehicles he had viewed) on Facebook, in Instagram, and on some other websites he visited such as his local newspaper. That’s because the car dealer had one or more retargeting pixels installed on the website.

Now that Bob has iOS 14 installed, when he opens Facebook for the first time he will be prompted whether to allow Facebook to track his activity. And because Bob isn’t aware of the positive aspects of retargeting, he clicks “Don’t track” and now Facebook can’t serve him ads that are relevant to him.

Key point though! Facebook will still serve him ads. Just not retargeted ones that are highly relevant. Instead of getting an ad for the car dealer that might let him know of a price reduction or even give him a coupon, he might get ads that are more generalized to his age/gender/marital status demographic. For things he may have no interest in.

So, the tech giants are swinging at each other, and we ordinary humans (I’ve chosen this Versus Movie metaphor and I’m sticking to it) are stuck watching and waiting to see who will win. In a normal movie this would be where the “real villain” would show up and the first two combatants would put aside their differences and join forces against the third party.

Unfortunately in this story, the third party is Google. And rather than teaming up, it’s just turned into a multi-way brawl. I promise I’ll explain, but first, let’s talk about cookies!

Sorry, no. Not those kind of cookies. Website cookies are used to keep track of a lot of things when a user visits a site. There are two kinds: first-party cookies (for example, items you’ve added to your shopping cart, your login details and so on) and third-party cookies (used to track your behavior across multiple websites). Retargeting pixels are an example of a third-party cookie.

Bloggers and pundits have been touting the death of the retargeting pixel for several years, with some good reason. Various web browsers have been phasing them out for a while now. Safari, Firefox and Microsoft Edge all have some form of third-party cookie blocking that is turned on by default. Chrome has been the last holdout of the big 4 browsers, and since it accounts for over 60% of browser market share, that has had some weight behind it. This is largely because Google and Facebook are widely recognized as the two companies who make the most money off of retargeting. But now, Google plans to phase out third-party cookies as well. And just recently Google announced they aren’t going to provide or suggest any alternative. “Today, we’re making explicit that once third-party cookies are phased out, we will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in our products.”

Wow, twist ending to our story. I guess if they made this into a Versus Movie they’d probably have Apple and Google fighting first and then Facebook shows up as the third party for them to team up against.

Except it’s not really an ending. Facebook is experimenting with alternatives to third-party cookies to enable advertisers to continue retargeting. Google isn’t planning to give up making money on ad revenue either. According to them “People shouldn’t have to accept being tracked across the web in order to get the benefits of relevant advertising. And advertisers don’t need to track individual consumers across the web to get the performance benefits of digital advertising.”

Where do we go from here? Many industry insiders are cautiously optimistic. With workarounds already in development, there is a possibility that reports of retargeting’s death are greatly exaggerated. When it comes to our clients, they can rest assured that we will be closely monitoring events and that we can quickly switch tactics, even in the midst of a campaign. Retargeting, after all, is only one arrow in our quiver.