Procter & Gamble Co. participated in the testing of an advertising technique being developed in China to collect iPhone data for targeted advertising, a move aimed at helping businesses make their way into Apple Inc.’s
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new privacy tools, according to people familiar with the matter.
The move is part of a broader effort by the consumer goods giant to prepare for an era where new rules and consumer preferences are limiting the amount of data available to marketers. P&G PG 0.18%
– among the world’s largest advertisers, with brands like Gillette razors and Charmin toilet paper – is the largest Western company involved in the effort, the people said.
The company has joined forces with dozens of Chinese trade groups and technology companies that are working with the state-sponsored China Advertising Association to develop the new technique, which would use technology called device fingerprinting, the people said. The advertising method, called CAID, is tested through apps and collects iPhone user data to serve targeted ads.
Apple is planning a software update in the coming weeks that will require app users to choose whether they want their activity tracked in the apps and websites of other companies. Apple has touted the new software as an important step towards putting privacy controls in the hands of users. Fingerprinting devices violates Apple’s rules, and the tech company has said it would ban any app that violates its policies.
“The App Store terms and conditions and guidelines apply equally to all developers around the world, including Apple,” said an Apple spokesperson. “We strongly believe that users should be asked for their consent before being tracked. Apps found to be overriding the user’s choice will be rejected. “
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and ad agencies are outspoken critics of the Apple changes for fear that users will not want to be tracked. They say the flow of user data is critical to providing more tailored digital ads that better serve consumers.
P&G, whose involvement has not been previously reported, said in a statement that it is providing input to the trading group in line with the company’s goal of finding ways to “deliver useful content that consumers want in a way that prioritizes data privacy,” transparency and consent. That means we partner with platforms and publishers, both directly and through our advertising associations around the world, ”he said.
The company declined to provide additional details about the program, including whether it plans to use the technology.
The tests involved ByteDance Ltd., TikTok’s parent company, and Tencent Holdings Ltd.
, according to people familiar with the case. Those companies operate some of the most used apps in China.
P & G’s second largest market is China, where the company also makes the most advanced use of its consumer database and routes 80% of its digital ad purchases through programmatic ads.
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According to documents from the advertising association viewed by The Wall Street Journal, the business units of accounting firms Deloitte LLP and PricewaterhouseCoopers and the rating company Nielsen Holdings PLC are also involved in the China-based efforts. Representatives for PwC and Nielsen did not respond to requests for comment, and a Deloitte spokeswoman declined to comment.
Apple’s changes are expected to have the most impact on marketers, such as game makers, who want to install apps on iPhones. Large advertisers like P&G, who can use their own data for advertising, will see less impact, said Aaron Shapiro, former CEO and co-founder of Huge, a digital advertising agency that has partnered with P&G and McDonald’s and was acquired by Interpublic Group.
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Still, at P&G – which has built up a formidable data operation for years – a lot is at stake.
“Digital advertising is all about the data,” Shapiro said. “Even if this problem isn’t a problem, they may just be progressive, which means proactively finding solutions for future measures that will take place.”
Apple’s privacy changes will revolutionize the digital ad industry and come after P&G spent years trying to carefully target digital ads to potential buyers. The consumer goods giant spent $ 7.3 billion on advertising in the past fiscal year and has long used its hefty ad budgets to spur the tech industry into better ways to prove that digital ads are achieving their intended goals.
Marc Pritchard, P&G Marketing Chief, has advocated a universal way to track users across platforms, including Facebook and Alphabet Inc.’s
Google, which protects privacy while providing marketers with information to better improve their messaging.
Frustrated by what it saw as technology companies’ lack of transparency, P&G began building its own consumer database several years ago to generate detailed information about consumer behavior without relying on data collected by Facebook, Google and other platforms. The information is a combination of anonymous consumer IDs collected from devices and personal information that customers are happy to share. The company said in 2019 that it had collected 1.5 billion consumer identifications worldwide.
Apple and Google have one of Silicon Valley’s most famous rivalries, but behind the scenes they are maintaining a deal worth $ 8 billion to $ 12 billion a year, according to a U.S. Department of Justice lawsuit. This is how they became dependent on each other. Photo illustration: Jaden Urbi
China, where Facebook and Google have limited presence, is P & G’s most advanced market for using that database. The company directs 80% of its digital ad purchases there through “programmatic ads,” targeting those with the greatest willingness to buy without showing them irrelevant or outrageous ads, P&G Chief Executive Officer David Taylor said at a conference last year.
“We are reinventing brand building from wasteful mass marketing to massive one-on-one brand building fueled by data and technology,” he said. “This stimulates growth while delivering savings and efficiency.”
China is P & G’s second largest market. The company said in 2017 it would invest $ 100 million in its digital innovation center in China, in part to bolster its digital marketing.
Facebook has been one of the most outspoken opponents of Apple’s proposed changes, which could hurt the core business of its ads. If users choose not to share their information with the social media giant, the company would lose some of the data it uses to create profiles of individuals for ad targeting. Advertisers say they would also have a harder time measuring the return they are getting on their ads.
Facebook CEO Mark Zuckerberg has reiterated in recent weeks that the change could make it more difficult for small businesses to market to customers. He also said it could strengthen his own company’s platform, making it more attractive to make transactions if online advertising isn’t as effective in general.
Write to Sharon Terlep at [email protected], Tim Higgins at [email protected] and Patience Haggin at [email protected]
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