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Google (GOOG -0.7%, GOOGL -0.7%) is building its Privacy Sandbox on the Android mobile device operating system – a move that follows Apple (AAPL -1%) in cutting back ad tracking on smartphones, and which comes with heavy implications for social media and digital advertising firms.
It’s a multi-year initiative to provide what Google (NASDAQ:GOOG) calls, “new, more private advertising solutions” that will “limit sharing of user data with third parties and operate without cross-app identifiers, including advertising ID.”
The company says it’s also exploring technologies to reduce the potential for covert data collection.
Alongside Apple’s (NASDAQ:AAPL) privacy changes to iOS, Google’s (GOOG) move could help accelerate the end of long-entrenched advertising approaches on smartphones.
However, Google (GOOG) implicitly criticized Apple’s (AAPL) approach in its announcement, saying , “We realize that other platforms have taken a different approach to ads privacy, bluntly restricting existing technologies used by developers and advertisers. We believe that — without first providing a privacy-preserving alternative path — such approaches can be ineffective and lead to worse outcomes for user privacy and developer businesses.”
Google (GOOG) says its goal is to develop effective and privacy-enhancing solutions to reassure users and benefit developers and businesses. It will support existing ad platform features for at least two years and give “substantial” notice of changes.
Related companies felt some pain all over again on Wednesday, as Meta Platforms (NASDAQ:FB) fell almost 3%, Snap (NYSE:SNAP) shares gave up 3.4%, Pinterest (NYSE:PINS) was down by 1% and Twitter (NYSE:TWTR) fell by 3.6%.
Notably, Google (GOOG) included a statement of support from Snap (SNAP) in its announcement. Snap (SNAP) said its has “made privacy a priority and placed it at the center of how we design our products. We are excited to collaborate with Google to develop new privacy-preserving standards for Android.”
Ad technology companies were also lower amid a broader market decline. Decliners included Magnite (NASDAQ:MGNI), which fell by 7%; AppLovin (NASDAQ:APP), off by more than 9%; PubMatic (NASDAQ:PUBM), down by 6.5%; Digital Turbine (NASDAQ:APPS), which fell more than 11%, and ironSource (NYSE:IS), down by almost 5%.
The Trade Desk (NASDAQ:TTD) was down by almost 3%, but that was an improvement after its earlier 11% drop that came after the company delivered a mixed fourth-quarter earnings report.
Updated 4:05 p.m.: The Trade Desk (TTD) managed an afternoon rally for a gain off its earnings beat today, finishing up 0.7%. But fellow ad-tech names slumped for the whole day: Magnite (MGNI) -6.4%; AppLovin (APP) -9%; PubMatic (PUBM) -6.3%; Digital Turbine (APPS) -9.4%; ironSource (IS) -6.3%.
And Pinterest (PINS) managed just a fractional loss, down 0.6%, but other social media names didn’t fare as well: Meta Platforms (FB) -2%; Snap (SNAP) -3.4%; Twitter (TWTR) -2%.
