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Discussing how iOS privacy changes can affect your business.

Brand wars: Facebook vs Apple.

Apple is implementing iOS privacy changes. This has caused a conflict between them and Facebook.

We invited Chris Barret, CEO of Operatic Agency to talk about this clash of titans. Is it a positive change or not? What’s the difference between opting in and opting out? How will this affect small and medium businesses versus big corporations? Is Apple on the right side of history or is Facebook right in fighting back?

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Recorded on February 19th, 2021

Transcript

Brad Breininger: 0:00

Hi, everybody, and welcome to this week’s Everything is Brand. This week we have a guest, his name is Chris Barret, from Operatic Agency. And we’re excited to talk to you today about Brand wars: Facebook versus Apple. Let’s go. All right, Chris, thank you so much for joining us today. We’re really happy to have you here as CEO of Operatic Agency, we’re really interested in your insight, you guys are a really respected digital agency. And one of the big things going on in the news right now is this conversation that we’re having about privacy where Tim Cook and Facebook have kind of started this little war with each other. And it all has to do with these new iOS privacy settings. What do you think of this? I mean, is this a game changer? What’s causing this? What what are your thoughts on this?

Chris Barret:

It’s a great question, Brad. And it’s a it’s a huge topic, as you guys know. I appreciate you guys having me here in general, and also to discuss it because I do think to a certain extent, it’s a game changer, but you got to be really cautious as to where that applies. So just for everybody’s edification, I guess the the focus here is on what’s called an IDFA. It’s an identifier for advertisers. It’s essentially a random device identifier that’s assigned by Apple to track users personal info, and importance, because it allows advertisers to do attribution modeling to see how campaigns are working correctly. And to better understand the qualities of people and their audience in order to appropriately target them. There is also an Android equivalent for advertisers. It’s called a GPS ad ID or a Google Play Services ID for Android. But it’s not really in the news right now. What they’re tracking or how they’re tracking as of right now is what’s referred to as an opt out. So you actually have to physically go on your phone and opt out. And only about 20 to 30% of people will do that, when they’re talking about with iOS 14 is opting in. So there’s going to be a very clear disclaimer with an app that’s going to say, is it okay for us to use this data that early estimates are looking like it might be more than 70% of people who are going to opt out? And they’re going to stop the ability for advertisers to do this? I think not to dodge the question, but it’s both good and bad. I think what’s good about it is that there’s a focus on data security, there’s a major issue with data security out there and a lot of nefarious actors. What I think is bad about it is that it’s becoming publicized just around this IDFA, which is really not the major problem to me, I think that a lot of people out there would be fine if they understood what was tracked and why it was tracked. And then it was properly policed. In that people were just getting customized advertising to them. Where I think things go wrong is when somebody like Facebook abuses that power. And they allow somebody to use the data with poor intent. So back to your Cambridge Analyticas, etc. And since 2018, it’s happened several other times, even in political campaigns, where people are using that data to manipulate people with false information. So I just think, overall, the conversation is a great one. I just wish it wasn’t so focused on the advertising piece, if you will, because that’s not where the real problem exists, in my opinion.

Gabi Gomes:

I was just about to say is that the elephant in the room? You know, it almost seems like this is getting wrapped around media over Apple and Facebook. But is this really Facebook, kind of not really doing what they could have done? And now Apple is taking a stance on it, essentially, with respect to the politics. Did this all kind of stem from that mis-abuse of power that they had? Would we be in this position, if they had done things differently?

Chris Barret:

I personally don’t think so? No, I think that is where it stems from is there consistent or track record in protecting people’s privacy and their data and allowing it to be misused. And now it’s kind of the unfortunate piece of it is that not only are advertisers going to suffer, and small businesses that maybe are not going to be able to target as well. But the recipients of that targeting are still going to get marketing messages, they’re just not going to line up necessarily with their, their wants and needs. And a lot of people don’t, don’t realize how much this data can be used for good. So as an example, Google’s location data is often provided to city planners obviously anonymized or provided to city planners to optimize city infrastructure to reduce traffic and to help people with their commutes and to plan smarter communities. So when it’s used like that, I don’t think people would have such a big issue with it. But when it’s used, you know, on the alternative to manipulate somebody’s opinion with false advertising, it can really cost people and make them worried, which is understandable.

Brad Breininger:

Yeah, it’s an interesting situation because Tim Cook is the first person at that level to come out and speak against this and really take a stand, as Gabby said, but I’m sure others in the industry have thought this for a very long time, it’s just been almost, I think it took someone like Tim Cook to raise their hand and say, okay, we need to do something about this, because Facebook has just become such a behemoth, that it’s difficult for anyone else in a smaller position to go against them. Do you think that Apple is on the right side of history here is is this something that we’re going to see more of where an industry that is pretty much been self regulated? And there’s been cries for more government intervention and more government regulation? But do you think that Tim is kind of drawing a line in the sand that says, Okay, if we’re going to be a self regulated industry, we don’t necessarily want this government intervention? So we really need to step up and take care of this in a much better way.

Chris Barret:

Yeah, right. I think your comment was absolutely brilliant to me. I love what you’re saying about the right side of history. It’s a complex answer, I think, yes, he is on the right side of history. But I don’t think it’s as meaningful away as it appears to be in his moral stance. So what I mean by that is that if Apple really cared as much about data privacy, as they’re saying, they do. There are many other things that they could focus on, as well as the IDFA approach. So to give an example, how many times have you heard about celebrity photo leaks from Apple’s images, right from their data storage, or cloud storage, one of their biggest cloud storage, centers is run out of China. And it’s under government control there. So there’s a ton of things that go on there. There’s also things like Safari is actually powered by Google. So Google pays Apple 9 billion a year at the last time I checked to have the right to have their search engine power Safari, and then collects all the data through Safari. So are they right in that things have to be properly protected? Yes. And do I think he’s making a stance? Yes. Do I think that it’s may be pointed at Facebook, because they have a poor track record and become a little bit of a battle with them? Because it’s easier than tackling the whole problem right now? Yes.

Brad Breininger:

Yeah. I mean, that’s a really good point. It’s not like, they’re not complicit in some of these larger issues. And so maybe Tim can get on the soapbox, but he’s not completely innocent, either.

Chris Barret:

Exactly. And it doesn’t affect their business model as much as Facebook or Google who is driven by targeted advertising, right, they’re more of a hardware provider. And if you look at something even like in app purchases, if advertising is reduced, then those companies are going to make less money. And then they’re probably going to switch to more of a payer model, where you would have to pay in order to download an app. And then if you have to pay to download the app, Apple will take anywhere from 15 to 30%, depending on revenue, right? So it ends up actually benefiting Apple, I also think that Apple is going to make a little bit of a stance on security for market share. I think if they become the really well known device security in the market, or running on iOS, it’s probably going to steal a little bit from from your Samsung’s and the like. So I don’t think there’s any way to take it apart. And a bit of a comparison for me is almost like, you know, Bill Gates is an exceptionally smart guy. And he’s talking about what goes on with vaccines or climate change. And oftentimes, he’s right. But it’s hard coming from somebody who’s maybe flying a million miles a year, while talking about climate change. So sometimes, they’re so well intertwined as topics that it’s very hard for Tim Cook to, as you said, stand on the soapbox, but then it’s difficult to segment like, yes, but you’re gonna benefit from this business wise, are you really looking out for us? And then if you were really looking out for us, what else would you be doing?

Brad Breininger:

Yeah, so sometimes you need the power to be heard. But that power also puts you in less than ideal position. So it’s a difficult line to walk. We have a lot of small and medium business listeners. And one of the issues that I think is really big in all of this is that digital marketing really provided a democratization of advertising for these businesses. And it seems like this new approach is going to pull away that democratization a little bit for those businesses in particular, I mean, it’ll be easy for the behemoths to go in and just find new ways to target. But that ease and simplicity that small and medium businesses have had in the digital marketing space is compromised, isn’t it?

Chris Barret:

So Brad, as as you just said there beautifully. Yes, it is going to be a bit of a challenge for small and medium businesses and that democratization is going to suffer a little bit because of the lack of targeting ability that was becoming automated within those platforms. And as you mentioned, those behemoths will be okay for two reasons. The first is that they’re going to be able to out-spend not just out-smart. So they’ll be able to do above brand advertising and brand building that will still create a level of demand generation that small businesses will not be able to do. The second piece is, is that they’ll have access to agencies like yourselves and US and other places that are able to innovate, and are able to spend time to solve the problems and learn about things that are coming out, like SK ad networks, etc, that, you know, are Apple’s kind of approved method of attribution. Now, when we have the luxury of doing these things all day, and it being our career and our passion, it allows us to overcome challenges like this and find a way, but then it takes a while to trickle back down to the small and medium businesses, so they probably will suffer for a little while with less accurate and targeting abilities.

Brad Breininger:

So, Chris, in your mind, what are some of the things that people can do in order to deal with that situation? Because it’s, it’s a little bit of a different landscape going forward? Is there anything that businesses can do to kind of overcome some of that?

Chris Barret:

It’s a great question. And to be totally transparent, we’re still in a little bit of a learning curve ourselves, Apple hasn’t been exactly clear with it. And there’s much bigger, brighter minds than myself with bigger budgets behind them trying to solve these problems still, at this moment in time. So developers etc, at big places like Google, what we do know is that there’s ingenuity in human beings, right, and we’ve overcome bigger challenge than this before. So I’m confident that with the challenge will become even bigger opportunities, we just need to figure out where the landscape is going to settle. Before we can really start working around it in a meaningful way, the biggest thing that I would do is to probably start understanding contextual advertising and your audience behavior to the best of your ability, which doesn’t always come just from targeting, there’s a lot of common sense and understanding your buyer personas and your archetypes, and why people are motivated to buy from you. And then you could understand then what other types of content, they would be consuming, right. And you can place meaningful content in in the moments that matter to them, and ensure that you reach them other ways. So I would look at contextual marketing in the short term. And I would also stick with, I’m not in a position here, where I would be saying to cut everything that they’re doing like stop Facebook, marketing, etc. There is a lot of people that are behind that, figuring out other ways to make sure that that’s successful. And trust me, when it a business model, like Facebook’s is resting on something like this, they’re gonna have other ways to make sure that that people are successful. So I wouldn’t throw the baby out with the bathwater as well.

Brad Breininger:

Yeah, I’ve been talking to a few other people about this. And one of the things that came up was this idea that it’s almost like we’re entering into a transition period between the way we used to market because we kind of took the way we always marketed and moved it into the digital realm. And what’s happening is that as we learn more in the digital realm, we’re finding out that there’s new and different ways to kind of go forward. And the issue that you brought up about content is a really strong one, because the content doesn’t necessarily have to be around sell, sell, sell, which has been the mantra of the advertising world for so long. But it almost can move into this idea of provide context, educate, bring people up to speed, it really is an opportunity to kind of look at things in a bit of a different way. I think that one of the opinions that I heard is that this really is a complete change to how we market and yes, the digital is driving it. But it’s also about like you said knowing your audience and coming at them in a little bit of a different way than perhaps you did in the past.

Chris Barret:

Yeah, I completely agree. One of the things that I always wish in our world is that people would better differentiate between sales and advertising and marketing. Advertising versus marketing. To me, when I’m marketing, I really want to be a solution. I want to put the right thing in front of the right person at the right moment, versus advertising, hitting something over the head, if you will. And I think that that transitions, your entire mindset brought, as you were just mentioning, where you can change that ABC or always be closing mentality to and always be helping mentality where you’re actually putting things in front of people that are useful. And the line that I always use with my team is to stop trying to interrupt what people are interested in and be what people are interested in. So that’s really the mindset that we work to bring to the table.

Brad Breininger:

Yeah, and that’s really about making sure that the content is relevant, making sure that what you’re putting out there is, is not just this idea where you’re trying to coerce or change but you’re actually trying to uplift, uphold all of those, all of those elements that kind of change it for people who are consuming your content. One of the issues that people have said is driving some of this is some of the political issues that we’ve dealt with over the last several years, particularly in the United States, but also here in Canada. I mean, it’s really putting people into these boxes where they’re only consuming content that is directly related to them, and they’re not seeing the full picture. Do you think that this new direction is going to be a) helpful to that? And what’s been going on? And b) Do you think that this was partly driven by by some of the fallout that we’ve seen because of it?

Chris Barret:

That’s a great question. My opinion is yes, this is the tip of the iceberg towards helping that because I think it’s drawing attention to it. Fundamentally, I think it’s back to that idea of of intent, where, if you’re using this data in order to answer somebody’s questions, and provide a solution is one thing. When you’re using the data in order to manipulate or persuade based on your end goal, it’s another, my hope is that this kind of high profile feud, if you will, draws attention to that. But then it spills over into regulation at some step. And in terms of laws, and not just the self governance that you’re we’re talking about before from from tech companies that actually working to stop the delivery of that type of content, because I think that’s far more harmful than putting something like a red pair of running shoes in front of somebody because they were looking for a red pair of running shoes. So I’m really hoping that this is just the tip of the iceberg in drawing attention to that bigger challenge. I do think a lot of it stems from this, because it’s political ideologies is a lot more in depth and potentially a lot more dangerous, like I said, then something like marketing, in residential, retail, you know, whatever different markets, you’re talking about, trying to put a solution in front of somebody.

Gabi Gomes:

I’ve always said this before, I think law is behind the times when it comes to tech. Sadly, I think first of all, they don’t know what’s coming down the pipe, there are a reactionary to it. And I’ll be the first one. And I’ve always said it, that they’re behind when the tech then does present itself as potentially problematic in acting on it. between Facebook or Apple or anybody else, Google, etc, they’re on the verge of playing God, in a sense, right? So fine, if Apple ends up winning this battle leaders for a while until Facebook comes up with something? And is that how we’re literally going to be operating that each one of these tech companies thinks they’re the Almighty and will run their business? And where does government play a role in it? Do we not think that laws need to government needs to act quicker, quicker, etc? I mean, one of the best things about tech is that it moves so quickly. Right? But government doesn’t.

Chris Barret:

It’s very well said. And I completely agree. I think one of the problems that if you look at it fundamentally is look at the lawmakers. Right? Look at actually who they are, their their demographics as an example, and where their focus is, they’re not paying attention to how quickly things move, and therefore, in my opinion, not really in an ideal spot in order to govern it. I’m not sure that they really even understand what’s happening. And if you don’t understand it in a meaningful way, then I’m not sure you’re really the ones to make sure that it’s done in a in an ethical way. So yeah, I think that there should be more intervention into it. And if there was more intervention into it, that I think a lot of the rest of the ecosystem in the value it provides would be left intact. But instead, as you said, it’s like positioning of one big brand against another big brand. And then whatever breaks the news that day. So yeah, I completely agree with you.

Brad Breininger:

It’s interesting how through all of this, people are kind of getting lost in the shuffle. So if you look at the small and medium businesses, these changes that these big organizations are making all of a sudden changes how they can operate out in the world. And it’s a little difficult sometimes to navigate that and we look up to these larger organizations, and we love the rate of changes. You said, Gaby, the rate of change that tech provides, but sometimes it can be a little off putting when you’re a business that’s just trying to build customers and build your business and build revenue and stay profitable, especially in the middle of a pandemic or as things are changing at 7000 miles an hour or legislation, you know,

Gabi Gomes:

And especially as we’re navigating towards a more local economy and supporting more local businesses. This is kind of detrimental to that movement. Right?

Brad Breininger:

Yeah, it’s really detrimental. It’s a barrier. In fact,

Chris Barret:

I think along those lines, that clarity and transparency is so important. Even for people who are involved in this in a day to day, I can’t even tell you that I’m entirely clear on exactly all of the data that everybody has. So I can’t imagine that somebody who doesn’t do this all day even knows what data is being collected. And then when you don’t know what’s being collected, it’s easy to become fearful of what’s being collected. And I think that, for me, it relates back to Google’s original statement. I don’t know if you guys remember this, but when it was emerging, they quite simply said their mission was Don’t be evil. And, yeah, and and really, it’s they have to all of these big tech companies need to abide by that if they’re moving so quick that, you know, the rest of us don’t know exactly what’s going on, you’re almost have to think that you’re in their hands and hope that those people are using good moral guidance in the decisions that they’re making. And that can be a little bit touch and go.

Gabi Gomes:

When they said that, did they have their fingers crossed behind their back? Yeah, I’m with you, Chris. I think part of me, I’m one that reads privacy policies and terms and conditions before I agree to anything. But when I finally do click, okay. It’s like hoping a prayer, you’re not going to steal my information, misuse it, click okay.

Chris Barret:

Well, that’s exactly it. A lot of people, when you look at Apple, as you mentioned there, the privacy policies, it’s back to that conversation. I mean, how many people have a lawyer on hand how many people even read it, and then those that do how many actually have a lawyer on hand to understand it to the degree that they need to? So there’s another example where Tim Cook could go and take a look at something and say, How do I make this really simple and easy for people to understand. So they actually read it, as opposed to a 12 page download that people just filled, resigned to if they want to be able to use their device?

Brad Breininger:

Well, I think that there’s a lot of moving targets with all of this. And and like you said, Chris, I think it’s hard for us in the industry to keep up but anyone who’s just running a business or working in marketing, I mean, there’s so much to take in and understand and put into context. And I think that we just have to be diligent and make sure that we take a look at everything that’s going on, and hopefully listen to podcasts that headline some of the details that are going on. But I think more than anything, what people need to do is they need to really get in there and understand the context around all of this, even if you don’t understand why it’s being done or how it’s being done, or what the changes are. Understanding how it affects your business. And understanding what you can and can’t do is going to be crucial going forward and reach out. Whether you’re a small or medium business, reach out to an agency, there are smaller agencies out there. There are all different kinds of people, freelancers who can help to really help get you to where you need to be because at the end of the day, you’re just out there trying to build your business. And as these big behemoths have their brand wars and go back and have their dragon fights in midair. The rest of us are left on the ground to kind of deal with the the fire that rings down. But but I think we just have to be really diligent about understanding the context, understanding where we need to go, and you know, making sure that our business stays healthy and able to operate. So Chris, thank you so much for joining us today. Chris Barrett, let me say once again, Chris Barrett, CEO of Operatic Agency, you can find them at operaticagency.com. They are our partner. We love everything that you’re doing. And thanks for joining us today. I think this discussion is really crucial to everything that’s going on right now. And like always, we’re just trying to provide context to listeners and help them navigate a very complex topic. So that’s this week’s everything is brand. Join us next week for a new topic, a new discussion and remember, everything is brand.

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