It could lead to over 50% drop.
Apple will soon be releasing its iOS 14. If that happens, Facebook’s Audience Network ad business could drop more than 50%.
The upcoming changes to iOS will ask users if they allow app developers to track their activity across websites and apps. Although iOS 14 will launch this year, Apple hasn’t said the exact date.
According to Facebook’s CFO David Wehner, Facebook is still trying to understand how the changes will affect its business and the entire ad targeting industry. However, he’s sure that it will be more difficult for app developers to grow through ads on Facebook.
Currently, advertisers could utilize an ID number so they can target ads better. The ID can also help in analyzing how effective the ad is. But in iOS 14, apps that want to take advantage of such an identifier will have to ask users if they want to be tracked each time the app launches.
Facebook stated that the company may stop developing its Audience Network for iOS altogether because it could not deliver more targeted advertising. It adds that the changes will affect publishers’ ability to earn through Audience Network on iOS 14.
It will make Audience Network ineffective on iOS 14. For the said social network, it will not make sense for them to continue offering it on iOS 14 in the future.
However, the Audience Network feature is just a part of Facebook’s revenue. The majority of its business in its own app will not be affected. The changes that affect the ability of an app to collect data will pose a massive threat to Facebook.
Facebook said that small businesses utilize its ad targeting feature and considered it as a lifeline during the pandemic. Thus, if iOS 14 will prevent these businesses from targeting people effectively using ads, then it could lead to macro-economic effects.
In a blog post, Facebook stated:
“We understand that iOS 14 will hurt many of our developers and publishers at an already difficult time for businesses. We work with more than 19,000 developers and publishers from around the globe¹ and in 2019 we paid out billions of dollars². Many of these are small businesses that depend on ads to support their livelihood.”
Facebook was also displeased that Apple decided to enforce the changes without consulting Facebook first. The social network said that industry consultation is vital for any changes to policies in a platform.
It’s right that many users will not opt to use the identifier because they don’t want to be tracked. It will harm the company’s business. However, privacy advocates may agree with Apple’s changes.
Facebook isn’t good at handling various aspects of its user’s privacy and data. In 2019, it settled with the FTC for a $5 billion penalty because it collected users’ data without their permission.
When Facebook bought Atlas for $100 million in 2013, it used the platform to track any person’s online activity and tie it together across platforms. The acquisition allowed marketers and agencies to obtain a view of campaign performance across various channels.