P&G reportedly testing Chinese workaround to Apple's privacy changes

Dive Brief:

Procter & Gamble is taking part in a test of a method in China to capture iPhone data for ad targeting, a possible workaround to Apple's new privacy tools, The Wall Street Journal reported, citing people familiar with the matter. P&G, whose brands include Tide detergent and Gillette razors, is the biggest Western company to support the effort.
The consumer packaged goods giant is among a group of Chinese trade associations and technology companies that are working with the China Advertising Association, which is backed by the government, on a device fingerprinting technology called CAID. It uses an algorithm to gather iPhone data through apps and track online consumers to improve ad targeting, per the Journal.
Device fingerprinting violates Apple's rules on apps, which the tech giant distributes through its App Store. The company has said it would remove apps that run afoul of those policies, the Journal reported.

Dive Insight:

As one of the world's biggest advertisers, Procter & Gamble is highly exposed to Apple's software changes that give consumers greater choice in sharing device identifiers with third-party apps. However, a separate opinion piece from The Wall Street Journal also pointed out that P&G partnering with the Chinese government — whose global reputation on issues like data privacy, transparency and consent is lacking — is worth taking a closer look at given the marketer's recent efforts to position itself as combating toxic masculinity, among other social issues.

P&G last year spent $7.3 billion on advertising, and has pushed for improvements in ad targeting and measurement to ensure it's reaching the right consumers. With many Apple customers expected to opt out of device tracking because of concerns about data privacy, advertisers have fretted that their media buys will become less efficient as they serve the same ads to the same consumers over and over, or miss their target audiences altogether.

The CAID technology being developed in China isn't unusual as marketers, agencies and ad-tech companies worldwide work to develop audience tracking methods that let consumers guard their personal identifiable information (PII). Device fingerprinting, which uses the information that computers and smartphones share with websites to help create a user profile, also has been around for years and has stirred controversy for being trickier for users to control.

CAID gathers data including device startup time, model, time zone, country, language and IP address — which aren't considered PII in China — to create a device identifier for tracking, the Journal reported. The technology can be used to follow the online activity of consumers even if they have opted out of sharing their device identifiers with apps and websites. Apple is plannig to roll out an update to its iPhone that notifies customers when apps want access to the device identifiers it installs in its products. The company has sent warning letters to app developers that use device fingerprinting technology like CAID, asking them to stop using the method within 14 days, per the Journal.

In an effort to improve its ad targeting, P&G has worked to build its own database to avoid being dependent on "walled gardens" like Facebook, Google and Amazon that have their own propriety data for audience targeting. P&G's database consists of anonymous device IDs and first-party data that consumers voluntary share. In 2019, P&G said it had gathered 1.5 billion identifiers worldwide, the Journal reported. That information will become even more valuable as technology companies like Google and Apple take steps to give consumers more control over their privacy.

The partnership underscores both the complexity and urgency of the data issue for marketers as digital platforms and regulators take a stronger stance on data privacy.