TMW #056 | iOS15 at the end of the internet, ads that reward people, and the Martech conference season.

Sep 26, 2021

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Welcome to #056, here’s the week that was.

  • iOS15 at the end of the internet. Personal information is the currency of Martech. Apple’s expanded privacy powers in iOS15 are a clear threat to the open internet and the tools that power it.
  • Trading rewards for attention. A little-known use case on advertising that gives users rewards for when they watch ads turns out to be something people really want.
  • Martech conference season: Dreamforce is the Met Gala of Martech, Opticon is more like Burning Man. Both were focused on the same thing: CDPs.
  • Everything else: Freshworks IPO, 4 phases of digital transformation, the irrationality of the blockchain, the SME tech landscape, government AI strategy, and why are hyperlinks blue?

✍ Commentary

iOS15 at the end of the internet. Every morning when I open my laptop lid there’s often a thought that crosses my mind - I owe my entire career to the open internet. Back when I was an early twenty-something my first digital course was a free, self-paced Google Analytics qualification, it was my start and it opened up the world of Martech for me. But as a young person, I realized something then that has become increasingly important since; I’m gaining skills for free because someone else in the world is paying Google to run ads, and in turn paying for services that are helping to build my career in this industry. This, readers, is the economic model that is slowly coming to an inexorable end. iOS15 is the beginning of the end of the internet as we know it.

This week iOS15 finally shipped, expanding Apple’s controls over user privacy on the internet, and bringing to market the much-feared decommissioning of the email open rate metric. The controls Apple is giving to users to protect their privacy are unparalleled and significant. These privacy controls include blocking email trackers, the ability to access a historical record of the data that’s collected on a person, and masking IP addresses and locations. While most headlines mostly focus on the blocking of IDFAs and email tracking, Apple’s privacy mandate is broader than most of us think.

It’s helpful to understand that Apple’s timetable for shipping features is usually a few years behind what they are working on today, and most of the time the company takes an incremental approach to what they are doing with software. iOS15 represents the largest shift to consumer privacy for any device and platform. This means that there will be more constraints to come as many other device manufacturers and operating systems will fall in line with this new privacy-focused expectation among consumers. The move to privacy seems like a valuable and entirely appropriate solution for consumers, and the data tells this story. On average only a quarter of people opt-in to tracking in apps using the ATT. The story is powerful, and we shouldn’t underestimate Apple’s ability to tell it and influence the direction of the entire advertising and marketing industry.

The untold story here, however, is what a shift to this kind of privacy will do to the delicate mesh of systems that power the free internet. Marketing technologies were built on the shoulders of the open web, a philosophy that says that no one company should control what everyone else can do with the data they collect. And as larger platforms increasingly control the vast majority of web traffic and data collection, this puts the futures of 8,000 Martech companies on shifting ground.

Because of this, we should be considering the impact that Apple will have on the future outlooks of the marketing technologist’s career. When trillion-dollar companies start restricting access to your customer’s data, what will happen to the thousands of PPC agencies scattered around the world? Or that analytics dashboard your team just built? Martech is beholden to whichever devices and infrastructure people are using to access the internet, and that infrastructure is changing. It’s on this precarious tower of cards that marketers can even use technology to meet customer needs in the first place.

This is why Facebook’s narrative about SMB’s is relevant. The company has announced this week that they have been underreporting iOS app conversions by 15% since ATT went live a few months ago. This implies that Facebook’s value proposition comes into question. If marketers can’t report on the performance of Facebook ads reliably, then there’s no clear reason to continue to do business with the company. Because Facebook’s business model relies on small business operators, they are the hardest hit. Apple’s continuation of their privacy mandate is prioritizing the user over everyone else’s business model and while they’re at it seeding the value proposition for their own advertising services over Facebook and Google. It’s not all altruism.

For all the flack third-party cookies have received throughout this conversation, this fact remains: Cookie networks are open networks. And because of cookies, the internet became ubiquitous, paying for the billions of people who use the web every day. Advertisers are literally paying for most people to access the "free" internet. Conversely, Paying for access to apps and content only works for the wealthy, and the majority of people can’t pay for paywalled services. Sure, privacy suffers in this system, but economic opportunity is extended to millions of people around the world.

So how should we respond to the challenges introduced by a more privacy (and Apple) focused future? Several principles come to mind. The first is the reality that the days of outsourcing your audiences are coming to a close. In the early days of digital marketing, many brands would rely on mostly one or two platforms to attract web traffic through paid ads and perhaps SEO. We’re now entering a stage where diversifying your channel spend into many smaller platforms will make more sense. However, it does create more headaches too when it comes to managing more platforms, data models, and figuring things out like attribution. However, there’s not really an alternative solution as a viable safeguard against the diminishing returns of platform control.

The other principle is what Web from 2PM calls “content fortresses for linear commerce”, the concept that more brands should be building their own first-party audiences by bolting media brands on top of their businesses. The rationale is that driving subscriptions and traffic from brand-created media can be a valuable way to collect first-party data and power sales. This is sensible advice for many brands but leaves many others out in the cold. How can you build a media brand around dog food? Or health insurance? Sure, if you’re a high-end fashion label you probably have a story to tell, but for commodity-focused companies, this doesn’t make much sense. Besides, a world where every single company is trying to get me to subscribe to their Substack is not a world I want to live in. Outside of media, there is alot of sense in working towards a value proposition for collecting first-party data, whichever form that takes, as long as it is aligned with what your customers want, there’s only value to be gained.

Right now people pay for the internet with their privacy, and the economy that enables this will be facing uphill challenges with the release of iOS15. Personal information is the currency of the Martech industry and depending on whether you’re trading this currency with Apple or Google, the paths to value will change. The challenge which leaders in this industry now face is balancing the right to privacy while also sustaining the ad economy that makes the internet a valuable place to be in the first place. Besides, if the ad economy got one bright-eyed young man to get his Google Analytics qualification and a start in digital marketing, it all can’t be that bad? Links: iOS15 changes to privacy. Facebook’s advice. 15% iOS web conversion underreporting. Bad ads. Apple’s move to kneecap Facebook advertising. Digital privacy is reshaping the internet. Linear commerce.

📈Chart Of The Week  

In-app shopping ads. New data released from Tapjoy show a substantial increase in ad spending in apps and a significant increase in offerwall ads. What’s interesting is that ads that result in an in-game reward for watching are preferred by users (88% of people surveyed said they like this option) and it is also proving to drive retention and loyalty. This is an interesting example of advertising that works as a product in its own right, but also meets the marketing objective. Link

📰 Latest Developments

Conference season. It’s this time of year in the Martech industry where everyone is planning what’s going to happen next year and the sales execs are out in force. This means it’s also conference season. Dreamforce happened this week, which is kind of like the Met Gala for CRM. Opticon also happened, the first conference after the Episerver acquisition of Optimizely. From all fronts, the big focus is on CDP, an indicator of a maturing market for this category of Martech. Dreamforce, Opticon.

Freshworks IPO. The customer service company previously named Freshdesk hit a $10 Billion valuation after launching their IPO this week. This Indian-based venture was backed early on by Google Capital, a bet that’s paid off well. It’s also interesting to note that Freshworks is the first SaaS company from India to go public in the US stock exchange. Link

Facebook’s login connect. The company has announced an extension to the Facebook Login developer product by enabling users to opt-in to Messenger conversations on sign-up. This means that brands will have an additional channel for customer service and promotions, but unlike email, Messenger is a centralized channel where you need to play by Facebook’s rules. Link

📚 Reading

4 phases of transformation. This is a good way of thinking about digital transformation for enterprise. Efficiency should be a primary focus for any transformative project. This builds foundations for getting to the customer-facing stuff. The ability to deliver quickly will impact everything else. Link

Intent and execution. Many executives plan how they will use technology over the course of a year and then try to execute. Perhaps a better way is to ask “where do I want to be”, create a list of what that might look like, and then figure out the how as you start executing. Our brains want to predict how we will achieve things, but in reality, the situation is always changing. In other words, “go with the flow.” Link

Blockchain and irrational exuberance. Gartner is predicting that blockchain technologies will reach maturity until the end of this decade. Right now there’s alot of hype, but the tech is not ready for mass consumer adoption, so there’s likely going to be many failed startups between now and then. Link (You can read my analysis on blockchain and Martech here)

🔢 Data & Insights

Gen Z digital attitudes. Gen Z values video content more than any other generation, and on average each person in this group has at least three video streaming subscriptions. It’s time to start believing consultants when they tell you to pivot to video. Link

The SME tech landscape. Most of the actual innovation in Martech is going into the SME market. Why? SME-focused Martech has to work well as a consumer product and be simple enough that anyone can pick up and use it. Small business owners won’t take hundreds of certificates just to learn how to send an email. Link

The top 5,000 fastest-growing companies. Fortune charges $8,000 to access their list of the top 5,000 growing companies. One guy got his team to create their own list and gave it away in a Google sheet for free. Thank me later. Link

💡 Ideas

Government regulation in AI. One of the biggest existential threats in technology is AI, but governments have been slow to apply frameworks and govern the sector. The UK wants to change this. Link

Strategy prompts. Good questions to ask product teams every month. To reduce the noise sometimes it takes writing down what you want to do every month. Link

Salesforce TV and data collection. There’s another reason besides revenue diversification for the Salesforce+ experiment. Collecting first-party behavioral data as people consume content will be an interesting input for Salesforce’s customer success and sales pipelines. I won’t be surprised if sales execs start emailing you about that CDP video you watched 20 times over the weekend. Link

✨ Weird and Wonderful

Why are hyperlinks blue? Link

Baked beans and brand purpose. Seriously? Link

Employee-as-a-Service. Next time you’re interviewing and the remuneration question comes up, send them this. Link

Stay Curious,

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Juan Mendoza

Juan Mendoza is an expert in researching global media, marketing, data, and technology trends. He is the CEO of The Martech Weekly, a media and research brand with subscribers in over 65 countries.

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