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Meta Lost US$230 Billion in Value in One Day

Is privacy the new enemy of profit?

Michael Kahn (MK)
Global CEO at Astound Commerce

IDFA tags allow advertisers to track an iOS user’s activities, including but not limited to how that user interacts with digital ads, in order to personalize the ads they see. The new policy allows users to opt out of that tracking, and studies show that a majority of iPhone users have done so—thereby eviscerating a major source of revenue for companies that create and depend on targeted ad platforms. And, as anyone who has been haunted by the same aspirational pair of shoes everywhere they go on the web can attest, no one relies more heavily on that tracking or those personalized ads than Facebook. Thus the exceptional valuation blow to parent company Meta, which has traditionally garnered more than 90 percent of its revenue from digital advertising.  

The change in Apple policy is just the latest in a slew of changes around data gathering, privacy, and transparency, as brands come to terms with a cookie-less future. Web browsers Firefox and Safari have been blocking third-party cookies—which track a user’s actions, capture this data, and provide it to outside sources—for years now, and Google will follow suit on Chrome starting in 2023. Therefore, brands need to get very comfortable very quickly with the concepts and practices of zero-party data, where data is collected voluntarily and directly from customers, and first-party data, which involves collecting data via a user’s behaviors and actions, including site navigation and purchase or subscription actions. In either case, consumer awareness is key, as is a true sense of the value sharing that data will afford. 

It’s clear that consumers are willing to give up their information if they see an obvious benefit to it, such as more personalized shopping experiences, a deeper offering when it comes to loyalty programs, or a onetime discount. In fact, Inmar Intelligence has found that 65 percent of consumers are willing to share their personal information with a brand in exchange for more personalized experiences, coupons, or other benefits, and that a whopping 90 percent believe that a brand’s ability to personalize their experience impacts how much they shop with that brand. In fact, only 9 percent of consumers aren’t comfortable sharing their data with brands—but transparency and control are the key differentiators. Brands that hone the process of collecting zero-party data in particular can use that process to create a stronger customer bond and build loyalty. So it's a circular experience, where brands and consumers both win and no one feels secretly taken advantage of. 

Getting this right isn’t optional, with 80 percent of respondents to a 2021 Wyng survey saying that a company’s data policies and ethical collection of data would impact their choice to do business with that brand. Now is the moment to implement strong practices around obtaining consent, articulating how data will be used, and giving visibility into and control over data privacy settings via an account preferences page or mobile app. Your brand’s mandate here is threefold: Empower your customers to control their privacy. Openly communicate the level of personalization your site will offer in exchange for data-sharing. Then vow to make that personalized experience the best it can be. 

Because while you may not be able to put a price on personalization, we know it’s in the neighborhood of $230 billion.

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