Facebook takes aim at Apple over '50% dip' in ad revenues

Facebook has warned businesses that iOS 14 is likely to have a devastating effect on targeted advertising.

In a post on its Facebook for Business blog, the social network and technology company said Apple's forthcoming update to the iPhone operating system could lead to a drop in its Audience Network advertising platform of over 50%.

If an iPhone falls in the woods...: Few ordinary users are likely to be weeping salt tears over Facebook's inability to track them on iOS14.  (Source: Tim Bennett on Unsplash)
If an iPhone falls in the woods...: Few ordinary users are likely to be weeping salt tears over Facebook's inability to track them on iOS14.
(Source: Tim Bennett on Unsplash)

The network lets mobile software developers deliver targeted in-app advertisements, based on Facebook's data. With iOS 14, apps that use this technology will have to ask users to opt in at launch.

Companies gathering personal data, then letting third parties use it to serve targeted ads, is controversial and often unpopular with users.

So it's unlikely Facebook and its customers will find much support for their position with a general public wary of tech companies snooping.

According to the company, over a billion people see at least one Audience Network ad per month – although the majority of mobile users are on Android phones.

Facebook said its apps on iOS 14 would not collect IDFA, the ID number that allows advertisers to target ads to individual users more effectively.

In other words, in a move likely to be welcomed by iPhone owners sick of advertising, advertisers are likely to find a significant chunk of their potential audience opts out, making them ineligible for targeted ads.

Moving target
The post gives details on how the company will approach the update.

"This is not a change we want to make, but unfortunately Apple's updates to iOS14 have forced this decision," said the post.

"We know this may severely impact publishers' ability to monetize through Audience Network on iOS 14, and, despite our best efforts, may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS14 in the future."

"While it's difficult to quantify the impact to publishers and developers at this point with so many unknowns, in testing we've seen more than a 50% drop in Audience Network publisher revenue when personalization was removed from mobile ad install campaigns."

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"In reality, the impact to Audience Network on iOS 14 may be much more, so we are working on short- and long-term strategies to support publishers through these changes."

Facebook is almost wholly reliant on advertising for revenue, although the Audience Network is only part of their advertising portfolio.

The new Apple operating system is expected to roll out later this year.

This is the latest swipe at Apple by Facebook, which criticized the company for refusing to budge on its 30% App Store fees, as the social network launched a free service letting small businesses host paid events via Pages.

Apple has also come under pressure to offer news publishers the same preferential deal it struck with Amazon Prime.

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Fiona Graham, editorial director, Light Reading

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