iOS 14 Poses as a threat for Facebook
With Apple's new operating system iOS 14 currently in beta, Facebook isn't thrilled with one of its upcoming ad features. Several Facebook blog posts mentioned the possible impact of Apple's privacy change. The update will allow users an option on enabling or disabling app ad tracking which poses as a threat for Facebook Ads.
In Facebook's defense, they do not collect data for its apps; however, the changes will more likely affect the Facebook Audience Network which depends on Facebook data to target more personalized ads on other websites and apps. “Like all ad networks on iOS 14, advertiser ability to accurately target and measure their campaigns on Audience Network will be impacted, and as a result publishers should expect their ability to effectively monetize on Audience Network to decrease,” they said. “Ultimately, despite our best efforts, Apple’s updates may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14.”
Facebook said that mobile app install campaigns received 50% less revenue for publishers during testing without targeting and personalization. "The impact to Audience Network on iOS 14 may be much more," it warned.
According to Anthony Ha's research in the adtech world, a lot of companies and investors saw the update as a simple game-changer for digital marketing. App Annie analytics general manager, Ron Thomas, called this "an acknowledgement from a top publisher that IDFA is truly gone and attribution in this post-IDFA world is changing."
US president and general manager at AppsFlyer, Brian Quinn, told Ha that Facebook's concern is a clear message to the nature of social media marketing. He added, “The possibility of losing Facebook Audience Network as a major source of revenue can potentially devastate the smaller publisher and developer communities on a global scale, which in turn would impact users worldwide that value and utilize apps as they navigate through their daily lives. The ability to deliver relevant ads to users – and prove their effectiveness through attribution – is integral for publishers and developers to build sustainable businesses around their apps and deliver quality content that users love.”
Quinn suggested a compromise, saying, “It’s possible to give users control over their data and still provide developers transparency through privacy-centric attribution solutions.”
Other people within the industry question Facebook's reaction to Apple's announcement. Well-known gadget reviewer, Walt Mossberg, claimed that there will be a lot more “griping about this from Facebook and other leaders of the toxic ad tech privacy theft industry." Mossberg defended iOS 14's new update, saying rather than harming publishers, its update will simply allow users to have an opportunity to choose.
Jason Kin of Digital Content Next, a trade body for publishers in and out of the business marketing world such as The New York Times and Condé Nast, agreed with Mossberg's statement. He claimed Facebook is "pretending to be the messenger of what's good for publishers." Kin also said the company may be using Audience Network publishers to deflect from its other data collection practices. He tweeted, “A majority of Facebook’s data collection happens across other company’s services and feeds the mother ship." Kin is not biased to Apple as he has raised concerns with Apple's effect on the ecosystem.
Facebook has also criticized Apple earlier in the month, saying the company has not waived its customary 30% fee despite announcing support for paid online events. James Currier of venture capital firm NFX recalled Facebook's conflict in the past. He said on an email to reporters, "In 2009 at the beginning of the Facebook platform, you could build an app on Facebook, go viral and gain millions of followers. But Facebook slowly shut down all the viral channels and put an ad server in the way, meaning app creators had to pay to get traffic. Facebook extracted what money they could from the app developers. Similarly, at the beginning of the iOS platform, Facebook could be an app on iOS and get millions of users. Now Apple is going to slowly shut off the oxygen in order to take the value for themselves. This is the law of the jungle and the network effect makes it pretty clear who has the power: iOS."
Eric Franchi of VC MathCapital suggested that the changes in privacy and ad tracking may create more opportunities for startups such as his own portfolio companies, Zeotap and ID5. According to him, Facebook's commentary emphasizes 1.) the dependence of the marketing ecosystem on a few operating systems and platforms and 2.) the importance of user identification on digital marketing. Franchi suggested that there is an opportunity for new forms of consent-driven identity solutions to rise.