Apple Vs Facebook: The Saga Continues; What The FTC’s Lawsuit Against Kochava Means

AdMonsters Wrapper: The weekly ad tech news wrap up
This Week
September 06, 2022
Things Are Heating up With Apple ATT & Meta
FTC Lawsuit Puts Consumer Rights First
Around the Water Cooler
Apple’s Ad Tech Battle with Meta Comes to a Head
Apple’s takeover of Meta’s ad tech empire has been years in the making, but the tech company might be preparing to put the final nail in Meta’s coffin.

Apple's privacy updates have already turned the ad tech industry on its head. Yet, in the context of this ongoing tech battle, the game-changing move cost Meta an estimated 10 billion dollars in revenue. Their recent decision is a more blatant attack on Meta's ad tech empire. They began hiring for roles seemingly aimed at poaching the Facebook and Instagram advertisers.

The two roles on Apple’s hiring pages seemed to be aimed at product managers working specifically with small businesses. The job details say that the two product managers should be “inspired to make a difference in how digital advertising will work in a privacy-centric world” and someone that wants to “design and build consumer advertising experiences.”

Although, an ad tech expert says that Apple is playing the long game with this move. These positions are being tailored to create a “multi-year strategy and execution," meaning they are looking to work with these advertisers for an extended period. The privacy updates have already pushed advertisers to jump ship away from Facebook, but these new hirings could topple Meta’s entire ad tech business.
Why This Matters
Apple has notoriously made campaigns around not sharing users' data. Since the release of their App Tracking Transparency (ATT) feature last April, the tech company has been ahead of the game in protecting consumers' data. A trend Meta CEO, Mark Zuckerburg, has only recently hopped onto.

On the other hand, publishers have struggled to figure out how to properly collect user data since the release of ATT. A struggle I’m sure Apple will use to their advantage. In fact, when ATT was first introduced, Facebook took out a full-page ad blasting Apple because the change would affect small businesses' ability to personalize their advertising.

Since the change, ad tech experts have seen a surge of ad spend dollars head Apple's way. Is this their way of creating a monopoly of ad data and dollars?

Analyst Eric Seufert believes it has more to do with pushing Meta out as they used to dominate the market.

“I think the revenue piece [of the ad market] is less important to Apple than just breaking up Facebook’s total ownership of distribution on mobile,” Seufert said. “Ads are a revenue opportunity, but, more importantly, they’re a discovery mechanic. My sense with all this is that they care about the revenue, but I don’t think that was the primary driver. I think it was about power.”
FTC Lawsuit Against Kochava Fights for Consumer’s Right to Privacy
The Federal Trade Commission put its foot down by filing a lawsuit against Kochova, who was releasing data from hundreds of millions of mobile devices. The company was selling information from sensitive locations such as reproductive health clinics, places of worship, and others.

According to the FTC, by giving up the data, Kochova is exposing these individuals to “threats of stigma, stalking, discrimination, job loss, and even physical violence.” If the lawsuit is successful, it will halt the sale of sensitive geolocation data, and the company will be required to delete any geolocation information they have already collected.

Kochova alleges that they collect the info because the data feed assists clients in advertising and analyzes foot traffic at their stores and other locations.

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, released a statement saying, “Where consumers seek out health care, receive counseling, or celebrate their faith is private information that shouldn’t be sold to the highest bidder. The FTC is taking Kochava to court to protect people’s privacy and halt the sale of their sensitive geolocation information.”
Why This Matters
The ad tech industry has been moving towards protecting user privacy, especially since the new regulations. This lawsuit is a step toward considering consumers' rights over their data, such as their location.

It begs the question of how much power should publishers and advertisers have over user data. Should they be able to sell their data without their permission?

Jessica B. Lee, Partner, Chair, Privacy, Security & Data Innovations at Loeb & Loeb LLP, asserts that this lawsuit is not simply an attack on Kochova but a warning that this business model is unfair to the consumer.

“The allegations address how data ‘could’ be used, and the likeliness of harm, rather than how data actually ‘is’ being used,” says Lee. “This is an unfairness action . An act is unfair if it causes or is likely to cause substantial injury to consumers that consumers cannot reasonably avoid themselves and is not outweighed by benefits to consumers or competition.”

The FTC is giving the industry a wake-up call that they need to find new and ethical ways to gain and use consumer data. It seems there is already much work to ensure that happens.
Around the Water Cooler
Here's what else you should know...

P&G Latest to Support UID2 UID2 is gaining more steam. With retailers like Albertsons and Target already on board with TTD's UID2, P&G will now be able to target people who have purchased P&G products and link that with a publisher's first-party data. This is a telltale sign for pubs who have been asking whether brands were on board with ID solutions. (Adweek)

Netflix Wants $65 CPM Buyers are a bit stunned by Netflix's asking price, which is higher than any other streamer. But many suggest it's not unusual for a new entrant in the streaming space to go high and negotiate lower prices later. (The Wall Street Journal)
Sweet Tweet
Should California Dictate US Privacy Rules?
"California ... should not be dictating privacy and data security rules for the rest of the country," top House E&C Republican @cathymcmorris
Worth a Listen
Stormy Forecasts For Ad Tech And The Economy
There's a storm brewing, and wildfires are raging. We're not talking about hurricane season or climate change but rather the fallout for ad tech from the macroeconomic downturn and privacy lawsuits, including the FTC's recent complaint against Kochava, which challenges the large programmatic data-selling model.
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