Privacy Protection vs. Accurate Advertising – The Battle for Digital Revenue

Apple has pulled the plug on Facebook’s distribution of an app that paid users to track detailed phone and web usage. It’s another sore spot for the social media giant, which has faced growing scrutiny in past months over user privacy and protection.

Jennifer Stromer-Galley, a professor at Syracuse University’s School of Information Studies and director for the Center for Computational and Data Sciences, says the larger story is about the future revenue models of the tech giants and the value associated with increased advertising accuracy.

Stromer-Galley says:

“This is a fascinating set of events. Facebook and Google are turning to these research practices because I believe they want to increase the accuracy of their classification of users to increase the value of their advertising.

“Given that both companies have established their companies’ business models on the backs of advertising revenue, efforts to improve accuracy of the categories of users will make them even more valuable to advertisers who want specific market segments and increased profit from their advertising investment.

“Apple, by contrast, has established itself very actively as not having an ad-revenue business model. Tim Cook has repeatedly said that user privacy is of utmost important to the brand and they aren’t selling their customers as eyeballs to advertisers. So, Apple’s move to ban the Facebook app further reinforces their message and brand image that such data-tracking practices by third-party vendors (in this case Facebook and Google) are forbidden.

“At a 10,000-foot level, this story is about the future revenue models of the tech giants.”

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