Similar to Apple's blockbuster data privacy moves last year, Android is phasing out sharing data with third-party apps.
"Currently over 90 percent of the apps on Google Play are free, providing access to valuable content and services to billions of users," Android vice president Anthony Chavez said in a blog post. "Digital advertising plays a key role in making this possible. But in order to ensure a healthy app ecosystem — benefiting users, developers and businesses — the industry must continue to evolve how digital advertising works to improve user privacy."
The policy will ensure its users won't have their information shared with other companies without explicitly knowing, something many consumers have been wanting. But the industry-wide shift to protect user data has affected many apps.
"Entities building user profiles based on cross-app behavior will be the most impacted, as they will lose the identifier to connect data," explained Łukasz Włodarczyk, vice president of programmatic ecosystem growth and innovation for marketing technology company RTB House.
Many companies, including Facebook and Snap, have cited lower revenue as a result of not having data on Apple iOS users for advertising targeting. It was one of the top reasons Facebook lost $230 million off of its market cap after its Q4 2021 earnings report.
"Mobile-first apps will certainly see an outsized impact from this if Google follows in Apple's footsteps," said Lauren Wetzel, chief operating officer for decentralized data collaboration platform InfoSum. "Two quarters into Apple's ATT changes, we've seen social media hardest hit, while major advertisers have also shared that Apple's changes slowed their user growth."
However, the major difference is that Google seems a little bit more willing to work with platforms and advertisers in developing their system, known as a Privacy Sandbox. The company said it plans on working on the process over the next two years and taking feedback, instead of immediately making the changes.
"In contrast, Apple significantly limited the availability of identifiers used for advertising without proposing an alternative," Włodarczyk said. "While significantly more complex than today's technology, Google's solutions will eventually lead to delivering relevant advertising to users, which will allow preserving the advertising effectiveness on a similar level while improving privacy protection."
For the average person, advertising may be a little less on-the-nose than what they usually shop for.
"While we don't know the specifics as of yet, Android users will likely receive similar prompts as iPhone users have in recent months asking whether or not they want to give an app permission to track their movements across other apps," InfoSum's Wetzel said.
But there is also a chance that a lot of the changes may be behind-the-scenes, so the average person won't notice anything different.
"Unlike iOS, none of the Android Privacy Sandbox proposals include an obvious user-facing element like the ATT tracking permission modal," said Alex Bauer, the head of strategy at mobile attribution company Branch. "In fact, if the process goes as smoothly as Google seems to hope, it should be almost an Indiana Jones moment where the big changes are mostly invisible: improved user privacy protections and better infrastructure behind the scenes."
But overall, with users more in control of their data, it could be a good thing.
"This approach benefits each stakeholder in the mobile economy," Włodarczyk noted. "Users will benefit because they will see relevant content and ads without being identified individually. Publishers will benefit because they will be able to monetize their inventory and advertisers because they will be able to reach the right audience."
Updated on February 18, 2022, at 4:09 p.m. ET, changing "decentralized data sharing platform" to "decentralized data collaboration platform" to describe the company Infosum.
