Personalized ads are a public good. Apple and Google are throwing the baby out with the bathwater by dramatically impairing the personalization of advertising on the mobile web and in apps (1/X)

2/ Personalized advertising does 3 things: 1) it allows advertisers to efficiently reach the audience segments that are most relevant to their products with ads, 2) it allows publishers to maximize the yield of their ad inventory...

3/ and 3) it allows audiences to enjoy a content experience that is consistent with their preferences. By allowing for ads personalization, platforms expand the economic utility of their content ecosystems.

4/ The problem: personalized ads are designed to feel organic to content, and people shouldnt explicitly recognize ads as personalized. Its hard for people to understand the counterfactual: what happens when ads arent personalized?

5/ The answer is that digital ads resemble TV ads: jarring distractions from core content experience. Non-personalized is another way of saying irrelevant, or at best, randomly relevant. If most consumers were asked if they wanted irrelevant ads, what would responses look like?

6/ The counterfactual case is something that consumers will be confronted with soon, as I discuss here: https://mobiledevmemo.com/consumer-behavior-changes-in-ios-14/

7/ So why do the platforms do this? One reason: to potentially give themselves privileged positioning. Personalization for me but not for thee. Here’s a developing case (iOS14 is still in beta and it remains to be seen if this makes it into release) https://www.forbes.com/sites/johnkoetsier/2020/08/07/apple-ad-network-gets-special-privileges-that-facebook-google-wont-on-ios14/

8/ Another reason is that consumer paranoia can be powerfully influential. “I spoke to my friend about Jamaica and then saw ads for trips to Jamaica!” This is mostly recency bias: people dont notice ads for Jamaica unless they have recently thought about Jamaica

9/ We are about to witness the economic damage that prohibiting personalization inflicts. And consumers are ultimately hurt by this: the free websites and apps from which they glean value / delight become economically unviable and shut down

10/ Counter-argument: Those free websites and apps are only viable when subsidized by privacy invasions — is profiling and tracking an externality that should be accounted for, maybe through a tax on the ad platforms? Maybe. That’d be a productive discussion

11/ Whats unproductive is a wholesale abolition of personalization. This hurts consumers. Its not economically optimal that platforms unilaterally make a decision like this without input from both consumers and developers.