In 2021, major big tech firms waged data wars against each other, and it was small businesses that got caught in the crossfire. Under the guise of a “concern for privacy,” Apple throttled small businesses’ ability to market their products on Facebook’s platform by restricting the information that ad platforms can collect.
Many already COVID-rattled businesses only just survived the pandemic’s economic onslaught. Now, a sudden spike in advertising cost and the loss of customer data placed an unnecessary strain on their bottom line.
2022 needs to be the year the Big Tech firms stop playing fast-and-loose with the small businesses they claim to support. Instead, we need universal, understandable data laws if we are to give small businesses a fighting chance during the next wave of COVID and beyond.
When COVID struck, we witnessed a 19 percent reduction in profitable businesses. Even as 2021 came to a close, as the worst appeared to be over, almost a quarter of business owners were still seeing a loss of revenue. Indeed, 34 percent of small businesses remain closed. Big tech’s data wars are merely adding salt to those economic wounds.
Last April, Apple announced a new privacy policy inviting users to opt-out of data sharing. In announcing this policy, Apple CEO Tim Cook criticized the tech industry’s collection and sale of user data. “This is surveillance”, he argued, “and serve[s] only to enrich the companies” that engage in it.
Those companies he refers to are almost certainly Facebook and Google, two of Apple’s biggest tech competitors. What Apple’s CEO did with his announcement was fire the first shot in Silicon Valley’s data war, depriving his competitors of the lifeblood of their business: data. In all this, though, it is the little man that suffers.
Let’s be completely clear: Apple does not care about your privacy. Just a couple of months after their privacy law change, Apple was embroiled in an entirely different privacy scandal relating to its proposed scanning of our private photos under auspices of detecting illegal material. This signifies how selective Apple is when they choose to care about privacy.
Its new privacy policy rather spawns from a turf war between some of the world’s biggest companies. The effect is to make business harder for Facebook and Google, whose data management systems were thrown into disarray following the move. This data, which feeds directly into advertising, is vital for their business.
Nevertheless, Facebook and Google continue to bank record-breaking profits. While the policy change prompted immediate anger, both companies are able to afford technological workarounds. In the meantime, it is small businesses that suffer from the fallout.
In the post-COVID world, business has gone digital; Deloitte estimates that 44 percent of small to medium-sized businesses started using or increased their spend on digital advertising. Using advertising packages allows an average, not-technically-literate business owner to tap into the endless data that tech giants have at their disposal.
With 96 percent of U.S. users opting out of app tracking, advertising costs have sky-rocketed, whilst their accuracy has slumped. We estimate that our clients have seen their digital marketing costs increase from 15 percent to as much as 40 percent over the past 12 months. Given that Facebook is such a key part of many business owners’ marketing strategies, they often have no choice but to simply pay the extra money for the same services.
Online stores that may not have repeat or long-standing customers rely on getting their ads placed strategically onto people’s social media fields. Now, they’re missing out on this vital source of revenue.
Last year’s tech war shows that what we need is a universal model for handling data, so that the bottom lines of ordinary businesses are not left to the mercy of Big Tech’s feuds and whims.
This does not mean inviting governments to implement strict, top-down controls on tech companies. Indeed, this could prompt further stress for the small businesses that use online advertising.
Even GDPR laws in Europe have not been effective in this regard; to sidestep these laws, Facebook simply moved their UK user base to American data provisions. Loopholes around laws will always be found so long as there is no consistent globally actionable policy.
We need all tech companies to be on the same page when it comes to privacy to prevent this jostling for reputation on customer security. So long as Apple, Google, and Facebook go their own ways on privacy, marketers will be deprived of large and valuable sets of user data and small businesses — not the giants — will be the ones to suffer.
So, in 2022, let’s not repeat the mistakes Apple made this year. Data standards need to be universal, transparent, and reliable. This way, small businesses, of which 99.9 percent of American small businesses are, don’t have to suffer at the hands of a Big Tech power struggle ever again.
Brendan Egan is a serial entrepreneur and founder and CEO of Simple SEO Group, a boutique digital marketing agency.