Apple Update Impact On Facebook

Apple’s recently delayed, but nonetheless upcoming, update to iOS14 (i)S 14.5) will include the already much discussed “App Tracking Transparency” feature, which will require that users give permission for apps to track them across other apps and websites.

Given the extent to which Facebook relies on advertising revenue, they are understandably unhappy about it, and it was largely pushback from the social media platform that has delayed the launch of this feature.

Facebook Fears Loss Of Ad Revenue

US news network CNBC interviewed some ex-Facebook employees about why this is such an issue.

Every Apple device has a unique identifier (the IDFA) which Facebook uses to tie together people who have viewed an ad, and people who have purchased from a retailers website.  Effectively, the IDFA lets them cross reference people who bought, with people who saw an ad for the product that was purchased, to help determine the effectiveness of advertising campaigns.

If advertisers can’t accurately measure the effectiveness of their ads on Facebook and Instagram, they may turn to platforms where their advertising ROI is easier to determine, and with Facebook being the second biggest recipient of online advertising money, (after Google), they’re concerned that people might spend their advertising money elsewhere.

Reduction In Facebook Audiences

The Facebook Audience Network is what allows Facebook to target users in non-Facebook apps, and the IDFA is essential in being able to personalise ad delivery based on specific criteria that the user might match.

If Apple users opt out of IDFA tracking though, that personalisation will only remain relevant inside Facebook’s own app, which could lead to as much as a 50% drop in the Audience Network, and while Apple will still allow some data collection, Facebook has warned that criteria like region, age or gender will effectively lose all data for Apple users.

Impact On Businesses

Facebook has warned investors that this could impact its revenue as early as this quarter, but the company has also publicly been stating that this change will harm small businesses who use Facebooks platforms to reach their clients.

According to one former employee though, the fact that small businesses are usually fairly local may go some way toward mitigating this, as they can more easily determine their audience without using IDFA trackers. For example, a local business may target users within a specific radius of the business. Facebook’s “think of the small businesses” campaign might be as much about their own reputation as about the welfare of advertisers.

Facebook itself may be facing far greater effects though, and the chances of convincing users to allow this kind of tracking is probably slim, despite it being a fairly benign method, because honestly, “tracking” has become a dirty word online.

The Future Of Tracking

The leading recipient of online advertising money, Google, has been pretty quiet about the whole issue really.  Google already announced some time ago that their Chrome browser would not be supporting cookies for much longer, and they have subsequently said that they will be moving away from individual / personal tracking completely within the next couple of years. (See “public opinion” above.)

On the one hand, that sounds great. On the other, I can’t imagine any situation where Google would simply give up on a large portion of their user data, so I have no doubt that they will implement an alternative that appears to cater to user privacy requirements, while at the same time providing all the data they need for targeting and tracking.