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CUPERTINO, Calif., U.S.: In the past, key steps in maintaining one’s privacy might have entailed drawing the curtains after dark, planting a hedge or shredding documents that contained personal information. Nowadays, in a world increasingly ruled by digital data, privacy begins with not opting in. Privacy changes in the 14th major release of Apple Inc.’s mobile operating system, iOS, have made it more difficult for companies to track users’ virtual activities and caused headaches for marketing departments—including those at leading digital dental brands.
Apple’s iOS 14 has significantly raised the bar for internet-browsing privacy. The tech giant’s new application tracking transparency (ATT) measures were launched with iOS update 14.5 and went live in April this year. Crucially, users are now required to actively opt in in order to share their device’s identifier for advertisers (IDFA)—a random identifier that Apple assigns to its products—with the websites and apps that they use. Before the update, users were required to actively opt out. Apple has effectively closed the faucet that allowed user-related data to flow freely to those who sold adverts online.
The changes have hammered social media platforms such as Facebook (which commissioned academic research that found that they represented an “anti-competitive strategy disguised as a privacy-protecting measure”) and resulted in challenges for the scores of companies that rely heavily on online advertising to inform consumers about their products, including digital dental brands.
But are internet users opting in?
This flow of data from IDFAs was sizable—picture Niagara Falls—and extremely lucrative for all parties, bar those to whom the data pertained. This fact was not lost on users, if current opt-in rates are anything to go by.
U.S.-based mobile apps analytics company Flurry surveyed user privacy choices from two billion mobile devices and found that users opted out in 96% of cases and that just a quarter of users had agreed when presented with an ATT opt-in prompt. The worldwide opt-in rate was 25% and the U.S. rate was 17%, according to Flurry, whose data related to the period between April and August this year. When the data was published, around half of users had either not been exposed to the prompt or deactivated such prompts in their device settings, and Flurry estimated that the ultimate tally of opt ins would be around 21%—a number “too small to support robust user-level targeting and attribution.”
Flurry wrote that it was time to move forward without IDFAs and proclaimed the time of death of the individual-level identifier as August 2021.
Digital-native dental brands forced to pivot on the back foot
Digital dental brands are proliferating, and many of them reach consumers in the same way that their treatment does: largely via virtual means. This is particularly the case for companies that offer partially or primarily remote treatments, such as clear aligner therapy, and the CEO of Align Technology, Joseph M. Hogan, confirmed that the privacy changes had been felt by the company.
He told analysts in late October that the company had registered some impact from iOS 14; however, he played down the significance of the privacy changes for the company’s brand marketing. “The thing is, there’s a lot of other media you can pivot to in order to find those patients,” he said. Hogan confirmed that Align had needed to adjust its marketing strategy, but suggested that the changes may result in lasting impacts. “I wouldn’t discount [the impact of the changes] in any way, in the sense of that change being material in some sense in the near future.”
David Katzman, chairman and CEO of remote clear aligner treatment provider SmileDirectClub (SDC), was more candid. In early November, he reminded analysts that SDC had called out the privacy changes as representing a problem for digital-native brands.
“In the past three months, there have been no fewer than 20 companies noting this change as a substantial headwind in [the second and third quarters],” Katzman said. “Facebook and Snapchat’s earnings last month reinforced just how material this change has been to their business. Similar to all of these companies, the privacy changes required us to pivot quickly to different lead strategies,” he explained.
“The new privacy rules, by design, reduce the amount of information marketers can collect” – Nishat Mehta, IRI
A large portion of SDC’s marketing budget was previously spent on advertising on Facebook’s platforms, and this had a high rate of conversion into sales. Now, the company is spending at least part of those funds elsewhere. “We’ve not only been shifting marketing spend away from these platforms to more TV, but we’ve also changed our lead strategy,” Katzman explained. “We are now focused on higher funnel leads to more efficiently and effectively drive long-term growth.”
Commenting on the “iOS effect,” Katzman highlighted that changes in the conversion funnel (digital lead tools that result in sales) required a re-optimization and re-targeting “because you really can’t follow these people around the internet.”
Kyle Wailes, SDC’s chief financial officer at the time, commented in a media release that, together with pandemic headwinds, the “Apple privacy changes earlier this year have presented significant challenges to digitally native brands such as SmileDirectClub.”
A step forward for big tech and a challenge for marketers
The privacy changes that came with iOS 14 represent a positive step for the tech industry, according to Nishat Mehta, chief product officer at media analytics and marketing research company IRI.
Writing in Forbes in November, Mehta said that raising the bar for data collection had provided marketers with a new challenge. He wrote: “The new privacy rules, by design, reduce the amount of information marketers can collect from third-party sources and thereby create new hurdles for marketers who have relied on that data to reach target audiences with relevant, effective marketing messages.”
Providing advice to marketers, Mehta said that first-party customer databases have been undervalued and could be further exploited. He explained that companies could further invest in existing customer relationship management systems, email subscription lists and followers on social media. Engaging with social media influencers and working together with retail and distribution partners are further strategies that he recommended to help marketers adapt to the new data landscape.
“Finally, an efficient marketing strategy—in today’s post-iOS 14 landscape and beyond—includes constant, accurate measurement so marketers can validate which marketing investments are driving the strongest results,” Mehta wrote.