After Apple’s announcement of its default news reader app, “News” that’s shipping with iOS 9, I learned that publishers will be able to monetize their News content using iAd.
Monetization is made simple with iAd, Apple’s advertising platform. Earn 100% of the revenue from ads you sell, and 70% when iAd sells ads for you. iAd provides campaign management, targeting and reporting capabilities that help drive your business.
Just one week prior to WWDC 2015 and the announcement of News, Tim Cook gave what Matthew Panzarino of Tech Crunch called a “Blistering Speech” on encryption and privacy. In that speech, Cook implicitly attacked companies like Google and Facebook when he stated:
I’m speaking to you from Silicon Valley, where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information,” said Cook. “They’re gobbling up everything they can learn about you and trying to monetize it. We think that’s wrong. And it’s not the kind of company that Apple wants to be.
– Tim Cook; Source: TechCrunch
On the one hand, Apple is taking on the role of the defender of Privacy, publicly saying that it does not sell its user’s data. On the other hand, Apple has simultaneously created a new platform that will allow publishers to monetize using targeted ads from Apple’s iAd platform. At first, this made Apple seem hypocritical, but after further thought, research, and analysis, I’ve come to realize that my initial feelings were mostly wrong.
All of Apple’s statements on Privacy and its attacks on companies like Facebook and Google boil down to one thing: conflicting opinions regarding appropriate business models. Apple is against the bulk and deep collection of personal user data for the purpose of making a business that is primarily based on selling ads targeted with that data back to those users.
Apple’s business model is based on selling products, not ads, so this is an argument they will always win. It’s essentially a moral conflict between views on appropriate business models. iAd seems to conflict with this philosophy because with it, Apple is enabling a platform for selling ads targeted at its users. However, Apple only makes 30% from ads that it sells and no matter how successful iAd becomes, I’m sure it won’t become Apple’s primary business. My guess is that the 30% is just there to help News and News Publisher pay for itself.
With that said, Apple is being slightly unfair, if not hypocritical, in the way it presents its case on Privacy. Apple usually focuses on three points, Scope, Security and Notice.
First, Apple declares that its personal user data collection activities start from a position of collecting the least amount of information, whereas companies like Facebook and Google start from the exact opposite. Nothing unfair here as this is mostly true. This is also an unresolvable conflict based on different business model philosophies. In the case of the business models of Facebook and Google, this wide scope of data collection is a necessity. For Apple, its a company value. In the future, though, each may end up moving closer to the middle.
We believe the customer should be in control of their own information. You might like these so-called free services, but we don’t think they’re worth having your email, your search history and now even your family photos data mined and sold off for god knows what advertising purpose. And we think some day, customers will see this for what it is.
– Tim Cook’s statement at EPIC dinner. Source: TechCrunch
Where Apple starts to run into trouble is when they make it seem like Facebook and Google are evil companies that take user’s data without permission, give unclear notice, if at all, on what’s collected, why it’s collected, and what it will be used for, and make it difficult, if at all, to revoke permission. This is not the case. Facebook and Google do take a lot of data, but they ask permission, they give notice, and they allow permission revocation. Can they do better? Yes. Will it matter to Apple? No. Even if Facebook and Google exceed Apple’s standards on Scope, Security, and Notice, they ultimately have conflicting opinions on appropriate business models.
iAd does not make Apple a hypocrite outright. It could eventually, but it probably won’t. Apple is being a bit unfair, but in this battle for user trust, its offensive is working.