Facebook’s ad business might take a serious hit thanks to iOS 14
The changes to iPhone’s operating system, which are set to be pushed out this fall, will limit how companies like Facebook and other ad companies collect a person’s unique advertising identifier. In other words, if a user isn’t comfortable sharing their “advertising identifier,” this will limit ad performance from iPhone users on iOS 14. Eventually hurting Facebook’s bottom line. Insert Palpatine meme here.
So why is this such a big deal for Facebook? Well, a lot of Facebook’s advertising partners rely on Apple’s “Identifier for Advertisers” (IDFA) user tracking feature. This allows them to see users by different categories and gives them a glimpse if they clicked on an ad or eventually downloaded a particular app. Basically, it’s one big tracking system and additionally adds more tailored ads to your experience. Fun, right?
Apple’s reasoning behind these significant changes is pretty simple. The company wants companies like Facebook and pretty much every app out there to ask users for explicit permissions to track them. If users don’t give these apps permission, then advertisers can’t track them. That’s really nice.
What Apple is doing here is commendable. Advertisers heavily rely on these “advertising identifiers,” so cutting them off from this treasure trove of data will hurt them. And the trade-off for users is that they won’t get personalized ads if they don’t consent to them. Which, to me, seems like a pretty fair trade.
But how does this affect anyone who’s not Facebook? Particularly indie app developers and small businesses? According to Kyle Waring, an ad tech product manager at Zynga, a lot actually. “This move will disproportionately affect small businesses and indie developers who rely on ad revenue to maintain their operations and personal income,” Waring writes to me in a Twitter DM. “Larger app businesses have diversified revenue streams and rely more heavily on IAP/subscriptions.”
So yea, don’t feel bad for Facebook. Feel bad for the small-time players who rely on this sort of thing. But for Facebook, they’re still going to get their money one way or another. iOS 14 is set to roll out sometime mid-September.
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