Google should be reacting to Apple’s smackdown on its privacy policies

This week Apple CEO Tim Cook aimed two thinly-veiled slap downs at internet services companies, such as Google and Facebook, which make revenue from collecting user data in order to serve them targeted ads. His attacks were strongly-worded and highly-visible – and those in the firing line shouldn’t be letting him get away with it.

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Cook’s campaign began with his appearance on US network PBS. As he was interviewed by Charlie Rose, he didn’t mince his words in saying he was “offended” by the way internet services companies that rely on advertising conduct their business.

He warned viewers: “I think everyone has to ask: how do companies make their money? Follow the money. And if they’re making money mainly by collecting gobs of personal data, I think you have a right to be worried.”

He continued his assault in an open letter on Apple’s new privacy website: “A few years ago, users of Internet services began to realise that when an online service is free, you’re not the customer. You’re the product. But at Apple, we believe a great customer experience shouldn’t come at the expense of your privacy.

“Our business model is very straightforward: we sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t ’monetise’ the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple.”

But it’s not quite so plain and simple.

Apple has its own mobile advertising network in iAd. And just like other advertising platforms, iAd does collect data – from user registration, geography, media consumption and purchase history – in order to sell targeted advertising.

Cook dismisses iAd as just a “small” part of its business, in his open letter. And he’s right: it turns over an estimated $250m a year (it doesn’t split iAd out in its financials), roughly the same media billings as mid-sized UK media agencies Vizeum or Walker Media took in 2012, according to Nielsen figures. Apple made $37.4bn in net profit alone in its third quarter. And iAd made up just 2.5 per cent of total US mobile ad revenue booked in 2013, according to eMarketer. But no matter how small a drop in the ocean, it still falls under the Apple umbrella.

Contradictions aside, Cook’s attacks on the biggest advertising players are potentially damaging to the digital advertising industry and should be rectified. Chances are most consumers are not well-versed nor interested in privacy issues, but with much-loved brand Apple casting aspersions on the sheer concept of digital advertising, their perceptions of the industry may sour.

Internet services companies and the digital advertising industry needs to stand up to this vicious attack. They need to explain that the way they make money allows the services we know and love to run for free and that the majority of Apple’s products come at a price.

The industry needs to come together to explain that while we’d all, honestly, probably prefer a world without advertising, it’s essential and that consumers have more control than ever over how their data is used and how to opt out of certain forms of targeting.

Microsoft, for example, would do well to mine the energy of the efforts put into its long-running Scroogled anti-Google campaign into a cross-industry charge with the purpose of dispelling the myth that advertising is not that insidious after all, no matter what the iPhone guy says.

Those who argue such a move is just defensive would do well to look at the timing of Apple’s privacy website launch: the same month that hackers managed to infiltrate its iCloud servers to access and leak nude photos of celebrities, and the same month it launched Apple Pay, asking its millions of customers to entrust the company with their money.

As Cook himself said, issues of privacy and data collection will be “a very key topic over the next year”. The digital ad industry needs to act now to make sure it isn’t based on misinformation, especially when some of tech’s most high profile figures are propagating it.

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