The huge business of Facebook was built on its ability to track users on the internet and personalization of ads. Now, thanks to the regulation that limits such data collection, this aspect is changing. Hundreds of engineers are rebuilding the operation of Facebook ads to give more value to the user privacy, according to Graham Mudd, a senior advertising executive at the company.
Facebook and editing ads
Facebook’s moves illustrate how the ad-supported internet economy is about to be remodeled. Along with Google, Facebook is looking into several privacy enhancement techniques to provide personalized ads “Without knowing anything about the specific individuals who see them”.
This is a turnaround from how ad targeting has worked online to date.
“We definitely see ad personalization will evolve very significantly over the next five years,” said Mudd, Facebook’s VP of product marketing for ads at The Verge. “And that investing well before that will benefit all of our customers, allowing us to help shape the future state of the ad ecosystem.”
The stakes couldn’t be higher for Facebook to get this right. Apple recently introduced a request on iPhones asking developers for permission to track users across other ad targeting applications.
Facebook has revealed that the request will likely hurt the its revenue growth. Google is planning something similar for smartphones Android. The European Union is considering a ban on micro-targeted ads as part of a broad legislative proposal called Digital Services Act. Instead, the Biden administration recently signaled an interest in controlling “user surveillance” by “dominant Internet platforms”.
Does the social network “admit defeat”?
Facebook’s new rhetoric about making advertising more attentive to privacy it is also, in a certain sense, admitting defeat. Last year, he ran a strong PR campaign in opposition to Apple’s request for ad tracking.
On that occasion, he argued that Apple was acting anti-competitive and harming small businesses that relied on ads to reach customers. But now Facebook is working on some of the same privacy-aware approaches to data collection that Apple uses. One example is “differential privacy,” a technique that intentionally turns data sets upside down for tarnish individual identities.
A spokesperson for Facebook disagrees with the claim that this change in privacy for ads marks a defeat in its struggle with Apple. “We are advocating a different and better approach to promoting privacy in advertising,” the spokesperson said. “One that relies on industry collaboration and a focus on supporting small businesses and an open internet economy. Apple’s approach is exactly the opposite: exercise its control over the App Store to benefit from its profits ”.
Facebook’s problems with Apple, which is currently building the own ad business, are far from over. Given Apple’s tight control over the iPhone, the two are likely to clash over an area of technology that Facebook is exploring, called “on-device learning.”
Instead of sending user data to the cloud, an algorithm comes run locally on a phone to determine the types of ads someone has would find it interesting and then show them those ads. The results are then sent back to the cloud in an anonymous, aggregated format for advertisers to review.