Apple’s claims on mobile privacy & payments with Apple Pay: Read what digital marketers say about it
By: Jeff Chester | Sep 11 2014
In announcing its new mobile payments system—called Apple Pay—Apple claimed that it had designed the service with privacy in mind. “Security and privacy is at the core of Apple Pay. When you’re using Apple Pay in a store, restaurant or other merchant, cashiers will no longer see your name, credit card number or security code…Apple doesn’t collect your purchase history, so we don’t know what you bought, where you bought it or how much you paid for it,” explained their spokesperson on Tuesday. But we believe Apple is being less than truthful here, since it has designed its new iPhone 6, and even its watch, to facilitate mobile and digital marketing to consumers.
While Apple may not—for now—keep track of your credit card and buying information, it knows that contemporary digital data-driven marketing will enable its slew of partners to gain access to your information. After all, why would “American Express, MasterCard and Visa, issued by the most popular banks including Bank of America, Capital One Bank, Chase, Citi and Wells Fargo, representing 83 percent of credit card purchase volume in the US” sign up as partners, unless they knew they would share in the digital data and financial information treasure trove about to be unleashed. Apple’s other new mobile payment partners, including McDonald’s, Disney, Walgreens, Subway, Macy’s and others, know they will be able to encourage their customers to provide them with their financial information and much more. These and other Apple partners—as does Apple itself—understand how the capabilities of mobile and related digital consumer marketing can be used to gather your information, know your location, spending habits and financial background. Yesterday, U.S.PIRG and CDD called for regulation of mobile financial marketing by the CFPB, including on payments, precisely because of the very comprehensive system of personalized consumer digital marketing that has been unleashed (which includes a slew of techniques to get a consumer’s data—regardless of which “screen” you use or where you are).
In order to better understand the impact of Apple’s new services on your information—and get closer to what will really happen--one needs to read trade and other marketing industry publications. So here are a few excerpts that illustrate that more will be going on than what Apple’s “don’t worry about privacy” PR ploy suggests.
First, Apple—which also has a small mobile advertising business—has designed its phone and new service with marketing and advertising in mind. As Adweek explained: “The devices represent new opportunities for brands and their agencies to develop campaigns. On the new iPhone 6 models, there is a promise of larger ad formats and richer video. The watch is sparking creative ways for brands to interject themselves into the small screen without being intrusive, marketing experts said…The next mobile software from Apple, iOS 8, has an upgraded notifications system, where apps can alert users of new content and the like. The notifications will be richer and more dynamic, and give users the ability to take some action like retweeting right away…” The same story quotes a spokesperson from ad agency Mindshare, which is working to monetize health data. They told Adweek that “"The watch is another screen where we anticipate a number of opportunities. How can we tell better stories with additive experiences there as opposed to intrusive disruptions?...."The bigger screens are a more powerful way for brands to tell stories," said the Mindshare rep. Ad Week concluded that “advertisers expect that it will eventually support iWatch marketing, expanding the ability to serve ads across platforms from iPhones to iPads to Apple TV to iTunes Radio and now the watch.”
Ad Age reported on the ad industry’s understanding that while today Apple won’t collect and share data, that is likely a short-term position: "Advertisers will be disappointed that [purchase data] won't be available in the near future, but to get people to adopt the platform, it's something [Apple] had to do. I don't think they really had a choice on that," said Rachel Pasqua, head of mobility at MEC Global. "It's elegant, but conservative," said David Hewitt, VP of the agency SapientNitro, said of Apple Pay. The company, he said, is aiming for broad adaptation before integrating the offering with apps, services and advertising. "It's that type of mentality that's going to change consumer behavior," Mr. Hewitt added…"There is always plenty of time to make more of that special data available for targeting later on. You can always add more data in later … but you can't repair a trust breach as easily," said 360i President Jared Belsky in an email.” And, as the story revealed, there are other ways for marketers to obtain the data: “Ms. Pasqua said the addition of Apple Pay might change matters if retailers adopt Apple Pay's register system, which could make redeeming Passbook-stored offers more seamless. Checkout systems "are a lot more mature than when Passbook rolled out. I think you're going to see a lot more ads on smartphones and tablets that enable you to instantly redeem and instantly save coupons and loyalty offers to Passbook.”
Apple’s revised “push notifications” capabilities are also a key tool to be used to facilitate connecting with consumers for data collection and marketing. Mobile Commerce Daily wrote that: “Over the last five years, push notifications have grown from a developer tool to deliver alerts to users to become the most transformative marketing technology of the last decade, driving dramatically greater consumer response than traditional channels such as email….Interactive notifications offer next-generation direct response marketing, but also so much more…With interactive notifications, the scale and breadth of user insight that can be collected and leveraged by non-technical staff – from the initial button tap to deep-linked clicks and responses to follow-on automation campaigns – eclipses what today’s best practice approaches deliver…iOS 8 will surface app suggestions on the bottom left corner of your lock screen, enabling you to easily open existing apps or download new ones relevant to where you are... Buttons and the push notification itself can each be deep-linked to different in-app and mobile Web pages… notifications are the gateway…for businesses to serve up messaging and app experiences that respond to their needs in relevant ways.
Long-time tech and media journalist Robert Hof wrote in Forbes that Apple’s “just announced a boon for marketers.” He quoted several tech experts and reported that: Apple Pay offers a more direct way for people to buy directly from a marketer’s ad, and with a device people rarely are without today. “Now you will have your payment info with your phone, which you always have with you,” he says. That makes it far easier to complete a transaction once you click that buy button, eliminating a major point of friction…What’s more, Apple Pay gives more marketers the ability to own the entire purchase funnel, from image ads on television all the way to the actual purchase, and even beyond. “Apple Pay gives brands the ability to close the marketing loop, all on one device,” Will Kassoy, CEO of mobile video ad firm AdColony, recently acquired by Opera, said in an email. “It’s true end-to-end marketing on mobile.” Thus the interest of Apple Pay partners from Target to Staples to McDonald’s…Not only that, but by maintaining direct contact with customers at the point of purchase, marketers have a better opportunity to make additional offers based on that purchase, cross-selling or up-selling other products and services. (Want fries with that?) “There could be more service-based plays for marketers,” says David Hewitt, VP and mobile practice lead for agency Sapient Nitro. Then there’s the more overt advertising play: notifications that can be sent directly to the Apple Watch, where they’re even more readily viewed than on a smartphone that may sit in your pocket or purse most of the time. Possible Mobile, for example, has been working for several months on apps that can take advantage of notifications enabled by iOS8, the latest version of Apple’s mobile operating software. “The key is information at a glance,” says Possible Mobile President Ben Reubenstein. “The push notification marketing will flow through to the user’s wrist.”
Digital targeting newsletter Adexchanger has this analysis from digital data marketing execs: "The potential boon to mobile attribution is clear. Imagine you’re walking down the street and you’re served a location-based ad or coupon for Sephora on your shiny new iPhone 6. You enter the store, pick up a product and bring it over to the checkout counter. If you use Apple Watch (or your phone) to pay, then the loop is neatly closed.
“That creates a fully attributed bridge between the phone, the watch, the campaign you saw and the actual transaction in the store,” Foroughi said. “Brands will have a better opportunity to understand what dollars are being spent in terms of transactions related to foot traffic, and as that starts happening, more and more dollars will start to shift toward mobile.” But location is table stakes by this point, said Yackanich, who noted that the true potential of a product like Apple Watch is “the opportunity to link a more personal profile to a user that’s authenticated to that person in a way that connects health information, behavior and commerce. The rest we already know through first- and third-party cookie sets.”