Apple’s OS is the second hottest within the world behind Google-owned Android. The company announced iOS 14 in June, and a full rollout of the new OS is predicted within the fall.
With Apple’s new restrictions on user data that make it harder to serve them with targeted ads & companies to track people’s data across apps, it could lead to a devastating effect on part of its business.
Advertising accounts for the overwhelming majority of Facebook’s business, and therefore the company’s ad targeting practices have long been controversial. Apple has repeatedly attempted to protecting user privacy.
On last Wednesday, Company published a blog post acknowledging the changes Apple has planned for Apple iOS 14 mobile OS. Apple intends to prevent apps from tracking users using their unique device identifier, or IDFA, without their specifically assigned permission — this is the data Facebook’s Audience Network uses to personalize advertising in third-party apps.
Facebook says quite 1 billion people see a minimum of one Audience Network ad monthly, although many of these are probably using Android phones and cannot be affected by the change. But would have a significant impact on its revenue on iOS by up to 50% because of an inability to deliver more valuable, targeted advertising. It may even force Facebook to prevent developing Audience Network for iOS.
“This isn’t a change we might wish to form, but unfortunately Apple’s updates to iOS 14 have forced this decision. We know this might severely impact publishers’ ability to monetize through Audience Network on iOS 14, and, despite our greatest efforts, may render Audience Network so ineffective on iOS 14 that it’s going to not add up to supply it on iOS 14 within the future,” the blog post said.
Audience Network is one of main source of Facebook’s revenue (it’s unclear precisely how much or percentage of Facebook and other properties), and its core business of advertising inside its own apps will be unaffected. But any plan to curtail data collection can pose a threat to Facebook.
During a recent earnings call with analysts, company executives argued that Facebook was a “lifeline” for little businesses during the pandemic which preventing them from effectively targeting people with ads could have dangerous “macro-economic effects.”
It’s a reason given in support that Facebook emphasis its Wednesday blog post: “We understand that iOS 14 will hurt many of our developers and publishers at an already difficult time for businesses. We work with quite 19,000 developers and publishers from around the globe and in 2019 we paid out billions of dollars. Many of those are small businesses that depend upon ads to support their livelihood.”
