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August 25, 2021

Branding Wars: Apple vs Facebook

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eBrandcast / Branding Wars: Apple vs Facebook

You may not know that back in the 2000’s, Apple and Facebook a good, mutually beneficial relationship. But since Tim Cook took over for Steve Jobs in 2011, a cold war between the brands broke out.

With the launch of the iOS 14.5 update, however, Apple is taking direct aim at Facebook, and the war has turned hot.

But this is more than two brands competing with each other: Apple and Facebook aren’t even direct competitors. Rather, the conflict between Apple and Facebook is clash of identities. It’s a brand war in the purest sense.

What can you learn from this clash of titans? Tune in to find out.

You'll Learn

What was behind the early bond between Apple and Facebook

Why the relationship between the brands soured so quickly

What the war between Apple and Facebook can teach us about branding

Resources

Full Podcast Transcript

Hello Beings of Earth! I’m your host Neil Verma.

Welcome to eBrandCast, where we decode what branding truly is, so you can build a dominant eCom Brand.

In this episode, we’re going to take a closer look at the war between Apple and Facebook, and why it’s actually a war being fought with branding.

As long as there’s competition, there are brand rivalries.

Some of those rivalries capture our imaginations and polarize consumers.

Coke vs Pepsi.

Sega vs Nintendo.

Marvel vs DC.

Apple vs Microsoft.

And more recently, Apple vs Facebook.

It’s a bit of an unlikely rivalry, since Apple and Facebook aren’t direct competitors, unlike Coke and Pepsi who are offering customers a very similar product.

And when it comes to direct competition, branding is your best weapon to gain an edge.

The identity and personality you give your brand, makes it more appealing to some consumers, who are then unlikely to accept another brand as an alternative.

Brands become part of a consumer’s identity.

For example, Coca-Cola is for the traditionalist.

Someone who wants the original.

Pepsi reinterprets Coke’s heritage as old and out of touch.

So Pepsi is for the young, the new generation.

People who value new, disruptive ideas.

When it comes to selling the same product, branding helps you stand out, and tells customers why they should buy from you.

Branding is the recognizable identity that builds trust and helps consumers on the fence choose you instead of your category’s other options.

So the idea that Apple and Facebook, who don’t appear to be direct competitors, are in the midst of an actual brand war may seem strange.

But with Apple’s recent software update, iOS 14.5, Apple has surgically targeted Facebook.

In case you’re out of the loop on this one:

The Apple update now prompts you when an app on your iPhone tracks your browsing and activity in apps and on the web.

You can then refuse these permissions and keep your private data private or allow the tracking.

For Facebook, a company’s whose business model depends on user data, the update wasn’t a welcome one.

Early data shows that around 96% of American users opt-out of data collection, so Facebook probably has a good reason to be worried.

But iOS 14.5 and its privacy update isn’t the beginning of this particular war.

And in fact, at the beginning of their relationship, Apple and Facebook were downright friendly.

Back in 2010, Facebook wasn’t quite the behemoth it is today, and Apple was only 3 years out from the release of the original iPhone.

In fact, Mark Zuckerberg and Steve Jobs used to go on walks together.

Jobs was a bit of a mentor for Zuckerberg.

And also at the time, Facebook and Apple supported each other.

Facebook users needed a device they’d be comfortable using for hours on end to access Facebook.

And Apple users needed engaging apps to use on their shiny new iPhones.

So, they didn’t see each other as competitors.

Until Zuckerberg realized that Facebook was really in a very vulnerable position.

As just an app, Zuckerberg worried that Facebook didn’t own the platform, and would be at the mercy of any rule changes Apple and Google made.

His solution was to develop a smartphone of his own – what was eventually The HTC First.

AT&T even signed up to be the exclusive seller of the Facebook phone, and use as the focal point of their advertising that season.

Unfortunately for Facebook, the phone wasn’t at all remarkable.

The design was boring, and the tech wasn’t exactly pushing the envelope.

The user interface, Facebook Home was also clunky and jarring for many users.

It was also available to install for free on any other phone.

So even priced at $99, The HTC First didn’t give anyone a reason to rush out to their nearest AT&T store.

In fact, within a month of launching, AT&T dropped the phones price from $99 to 99 cents.

Although it was a failure, it was also a warning shot at Apple that Facebook wasn’t going to stay out of their sandbox.

A few years later, to compete with Apple’s iMessage, Facebook bought WhatsApp.

And just as the lines between Apple and Facebook started blurring, Steve Jobs died, and was succeeded by Tim Cook.

Unfortunately for Zuckerberg, Cook genuinely dislikes Facebook’s business model, and in particular, its reliance on secretly tracking and sharing user data.

But at this stage, the growing tensions between Facebook and Apple are really more like a cold war.

From the consumer’s perspective in 2015, there’s no overt rivalry between the brands.

What really kicked off the current hot war, was the 2016 US presidential election.

Following Donald Trump’s unlikely win, a lot of information starting surfacing about Facebook’s role in the election.

Suddenly, the conversation was about how Facebook’s algorithm amplified and spread misinformation.

And the Cambridge Analytica scandal, which revealed the company had leveraged Facebook user data to refine their message and target voters, added to the image of Facebook invading people’s privacy. 

The fallout included an avalanche of bad press for Facebook, as well as Mark Zuckerberg being called to testify in Congress.

You might remember, right around the same time, Apple was in the midst of a controversy over user privacy as well.

In December of 2015, following the mass shooting in San Bernadino, the iPhone of the shooter was recovered by the FBI.

However, the FBI wasn’t able to circumvent the phone’s security and access the shooter’s files, messages, and apps.

Investigators approached Apple about giving them backdoor access into the device.

In fact, the FBI wanted Apple to update their operating system to include a feature allowing authorities to circumvent Apple’s security features in order to assist this and future criminal investigations.

Apple refused, saying it was their brand’s policy not to compromise their device security features.

The FBI tried to compel Apple’s cooperation under the All Writs Act, a case which landed in the court system.

But the scheduled hearing was cancelled when the FBI was able to hire a third-party who unlocked the shooter’s phone, and the Bureau withdrew their complaint.

At the time, public opinion was split about whether or not Apple was making the right move.

A CBS news poll found that about 50% of Americans sided with the FBI, while 45% sided with Apple.

A good theory as to why the case didn’t blow up in Apple’s face, is that after the FBI gained access to the phone, the LA Times reported nothing of relevance to the investigation was found.

The shooter had apparently used the phone strictly for work purposes.

As for the dispute with Facebook, after years of behind-the-scenes tension, the Cambridge Analytica scandal gave Apple the opportunity to go on the offensive.

Apple was already reforming their brand to include better privacy and security features, something that was now a critical public issue, and helped them standout from every other tech company in Silicon Valley.

One of these features was the announcement that Safari, Apple’s web browser, would phase out its support of browsing cookies – which would prevent brands like Facebook and Google track what users were looking at online.

They also created Screen Time, an app that let you know how much screen time you were accumulating, and whether you were spending too much time on your phone.

During the public demo of Screen Time, Apple used Instagram as their example app.

But the real public fight started following an interview Tim Cook had on MSNBC the week Mark Zuckerberg was testifying in Congress.

The host asked Cook what he would do in Zuckerberg’s position.

Tim Cook said: “I wouldn’t be in this situation. [Apple]’s not going to traffic in your personal life. I think it’s an invasion of privacy. Privacy, to us, is a human right. It’s a civil liberty. And it’s something that is unique to America.”

To all you eagle-eyed branders out there, you can see what Cook is saying here.

Not just that Apple and Facebook have a different approach to user data and privacy, but that Apple sees protecting privacy as fundamental to their brand purpose.

That this is a line that Apple will not cross.

They were even willing to stare down the FBI to uphold their promise to consumers.

Of course, Facebook didn’t take this shot laying down.

Following Tim Cook’s MSNBC interview, Zuckerberg went on The Ezra Klein Show to respond.

He said: “The reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can’t afford to pay. I mean, look, if you want to build a service which is not just serving rich people, then you need to have something that people can afford.”

Basically, what Zuckerberg is saying here is that their model collects revenue from advertising in order to keep Facebook’s platform free.

But that wasn’t the end of his statement.

He continued: “I think it’s important that we don’t all get Stockholm syndrome an let the companies that work hard to charge you more, convince you that they actually care more about you.”

Facebook is also leaning on their brand purpose here, which is to connect people.

Zuckerberg argues that their model might depend on user data, but that’s only to keep their service accessible.

But in 2019, during a conference, Tim Cook and Mark Zuckerberg decide to sit down together and figure out their differences.

The story, is that Zuckerberg asked Cook what he thought Facebook should do considering all the scandals swirling around them.

Apparently, Cook told him that Facebook should delete every bit of data they had collected on users from outside of Facebook’s apps.

It wasn’t really advice.

Tim Cook was just reiterating to Zuckerberg that he hated Facebook’s business model and found it morally unacceptable.

Which is what brings us to iOS 14.5.

Apple announces the update’s App Tracking Transparency feature.

Facebook has since gone on defense.

Facebook has organized a campaign highlighting how their advertising supports millions of small businesses who make up the majority of their ad buyers.

They took out full page ads in The New York Times, The Wall Street Journal, and The Washington Post to educate the public on how Apple’s could impact local and independent companies.

They also pointed out that these ads became a lifeline for many entrepreneurs when the pandemic closed their retail locations.

And that 44% of small to medium businesses started or increased their use of personalized ads in 2020.

Facebook also warned that the update could see a 60% cut in sales for every advertising dollar they spend.

Alarming numbers, but they’re also a bit misleading.

The Harvard Business Review pointed out that Facebook’s “60%” warning was based on ROAS, return on advertising spend.

This is a metric that tells you how much revenue is associated with marketing, but that doesn’t mean revenue caused by marketing.

In addition, while 44% of business increased their use of personalized ads.

35% also increased their use of non-personalized ads, which don’t rely on user data.

And that still leaves 56% of small and medium businesses that didn’t spend more on targeted ads or who decreased their ad spend.

This doesn’t mean Facebook doesn’t make a good argument, that their service supports a lot of small entrepreneurs, but they’ve struggled to counter Apple’s narrative.

Tim Cook himself, in a speech made at the International Data Privacy Day in Brussels, also added:

“Technology does not need vast troves of personal data stitched together across dozens of websites and apps in order to succeed. Advertising existed and thrived for decades without it…

It a business is built on misleading users on data exploitation, on choices that are not choices at all, then it does not deserve our praise. It deserves our reform…

We can no longer turn a blind eye to a theory of technology that says all engagement is good engagement … all with the goal of collecting as much data as possible.”

Unfortunately for Apple, they can also be accused of “turning a blind eye.”

Facebook has also pointed out that Apple’s update probably has more to do with targeting Facebook and Apple’s brand image, than reality.

Apple’s iPhones are sold in China, whose government exercises heavy censorship and invades the privacy of their citizens every day.

To even operate in China, Apple had to agree to host iCloud’s servers in China.

Apple also has a search deal with Google, who collects as much personal data on users as Facebook does.

Finally, Apple also sells advertising inside the App Store, where you can pay to have your app show up in searches.

Ultimately, though, the argument comes down to the brands and what will resonate with consumers.

Apple definitely has an edge here.

Their dedication to user privacy fits them as a lifestyle brand.

As Tim Cook explained, Apple wants to create “ethical technology” which he describes as being “technology that helps you sleep, not keeps you up. It tells you when you’ve had enough. It gives you the space to draw or write or learn, not refresh just one more time.”

In a previous podcast we dove into Apple’s brand and how it’s centered on the essence of simplicity.

Apple’s approach to privacy fits this image perfectly.

They’ve made ownership over your data easy to understand and control.

They tell you explicitly what apps are tracking you and allow you to turn it off with the tap of a button.

And if the FBI needed their help to open a phone, you know your files and messages are safe.

In an ecosystem of simplicity, a simple message on privacy really connects with Apple’s users.

Facebook’s message is more vague.

First, Facebook is a social network, from the user’s point of view, it’s a tool, not a service or product.

Facebook’s actual business is selling ads.

As it stands, access to more data is part of their value proposition to ad buyers.

And although their message about supporting small businesses is persuasive, it’s not as universal as worrying about your personal data.

Not everyone is an entrepreneur, but everyone has user data they’d probably prefer to keep private.

And compromising that security in order to keep selling ads doesn’t really rise to the level of a meaningful brand purpose.

Will this debate sink Facebook?

Definitely not.

As we’ve covered before, Facebook is one of those brands people dislike, but find too useful to give up.

For now, Facebook is shielded by a huge network effect.

The mere fact that Facebook hosts almost everyone you know means you almost need to participate to keep in touch with them.

It reveals that the truth is that while Apple is certainly benefitting from our concerns about online privacy,

People rarely behave in a way to that proves they really care about online privacy.

Everyone knows Facebook and Google collect their data, but they still use their services.

In fact, many of us voluntarily sign up for and participate in apps that we know are sharing out data because we want the convenience and services they provide.

The relationship between users and Facebook is more symbiotic than Apple makes it out to be, but at the end of the day,

Facebook is a data company.

And users are their product.

The question is whether you’re willing to participate or not, and that’s Apple’s point here.

Apple isn’t preventing Facebook from tracking Apple users, it’s only making them aware that it’s happening and giving them a clear option.

Facebook hasn’t been transparent with users about the extent to which they’re being tracked, and exactly how their data is being used.

So again, their message that they’re really just trying to connect people and support small businesses loses some of its sparkle because they’ve been fairly dishonest about their business model.

And while, yes, Apple isn’t innocent in this particular brand war, they have a major edge over Facebook in terms of their brand.

The message about privacy and implementation both fit Apple’s identity, and there’s more alignment with their public behavior.

Facebook has been evasive about how they collect data, so suddenly claiming it’s all for a good cause doesn’t track.

If they really believed they were bettering people’s lives and privacy concerns were misplaced, they would have been upfront about it.

Apple shutting down the certainly wasn’t planned, but it was a dramatic, public assertion that privacy mattered to them.

And because it came with real consequences, it rings authentic.

But for Apple, this goes beyond their battle with Facebook.

Because Apple has spent decades building a lifestyle brand whose purpose has always been to support their users.

Their approach to technology and design has always been to support the user’s creativity and free them from confusion and frustration.

Apple tech is intuitive and just works.

It creates peace of mind that lets people focus on what matters most to them.

More recently, Apple has evolved into the well-being space.

In fact, Tim Cook said recently that he hopes “health and wellness” is Apple’s greatest legacy.

The Apple Watch was Apple’s response to the FitBit device, but with more functionality.

The tagline for the most recent Watch, Series 6, is “The future of health is on your wrist.”

The interesting element here is that Apple does collect health data from Watch users.

But it’s opt-in, and users are reassured that their data is shared anonymously with researchers, not advertisers.

And most users do agree to share those numbers.

So again, Apple’s purpose isn’t just a tagline. 

Everything in Apple’s brand is aligned around a clear lifestyle.

Even Apple’s headquarters is designed in a way to promote health:

There’s a 2 and a half mile track around the campus that people run.

Amenities are spread out to encourage people to walk.

And pre-COVID, many staff members chose to bike between meetings.

And as Apple continues to innovate the capabilities of wearable tech, Cook has reiterated that the lifestyle is everything.

He told Outside magazine that “As a platform owner, we have a responsibility for how a product is used, and not just to throw something out there and see what the implications of it are.

We’ve never designed our products to dominate people’s lives.”

The bigger takeaway here is that it all comes down to your brand’s core.

Don’t underestimate the long-term value of taking the time to cultivate a brand purpose that means something to you, and your audience.

And then support that purpose with values.

This is a step Facebook seemed to have skipped.

Let’s take them at their word, that their purpose truly is to connect people, and hey, that might mean offering a free service that relies on advertising revenue.

But the top value at Facebook, very famously, has always been “Move fast and break things.”

So how extensively they collected user data for advertisers, and how seriously they took user privacy weren’t priorities.

In fact, user privacy turned out to be what Facebook was willing to break.

Is it wrong for Facebook to be a data company?

Of course not.

Most of us are willing share our data in exchange for personalized service, and better experiences.

But we’d also like the opportunity to consent, first.

Apple aren’t perfect here, but it’s clear that the brand does have a clear, principled view of the role technology should play in our lives.

And they have a clear sense of responsibility to their users.

Facebook has a brand purpose, but they are missing the values that keep their ambition in check.

It’s this gap that makes them a data company, and not a genuine service.

And so as you build your own brand, the lesson here is that when you’re shaping your brand’s core, you’re not just crafting a tagline.

You should be defining your brand’s lifestyle.

Not as an advertising technique, but as the philosophy that steers your brand.

Unfortunately, vague good intentions aren’t enough.

If you don’t put a stake in the ground over your brand’s core, including values, you won’t be in a position to actually serve customers.

Instead, you’ll just be another company who takes advantage of customers in order to reach business goals.

Is it harder to build a brand with a lifestyle and worldview?

Of course.

It’s a path that will require sacrifice and risk.

But it’s going to be what makes your company meaningful to consumers long-term.

And isn’t that the kind of business you’d rather have?

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