Facebook Warns iOS 14 Changes Will Lead to Advertiser Revenue Drop
Facebook is making it known that the company believes changes to Apple's advertising rules will hurt ad revenue across the internet. These changes will come as part of the iOS 14 update scheduled for most iPhones this Fall. Both Facebook and Apple have strong cases here, in terms of morality, but there's probably no way to determine which company is in the right until a larger conversation about online privacy occurs amongst the public.
The way things currently work benefits massive corporations like Facebook and Amazon far more than it does Apple. Today, apps can track your digital footprint across the internet to get a picture of the kinds of things on which you spend your time online. That information is then used to target you with ads related to your recent interests and, of course, those specialized ads have a much higher chance of earning your attention than random ones would. This system is the reason you see things like car ads on Screen Rant after searching for a vehicle on an app like Carvana.
The proposed change for iOS 14 would see Apple enabling a prompt to any iPhone user running an app that tracks this kind of data. The prompt asks the user if they're okay with this app tracking them across other services with the intention of sending personalized ads. It's safe to assume people will opt-out of the system given such a chance, which means those companies will have to run standard ads on the iOS versions of their apps. Statistically speaking, non-personalized ads perform markedly worse for businesses which hurts the company doing the advertising as well as the platform on which the ad is being shown, which is why Facebook – a great example of the latter – is publicly calling Apple out about the potential damage this does to small businesses on its blog.
Facebook's blog post paints Apple as a selfish corporation more concerned with winning points in the court of public opinion than with small businesses having access to valuable advertising routes. There's some truth to that assessment. A privacy-first attitude is a core part of Apple's brand identity and this is a strong stance against profiting off user data. However, it's definitely not lost on Apple's policymakers that an advertising change of this magnitude would barely affect the company. Apple practically has nothing to lose here, which is scary because it could have massive negative impacts on the rest of the internet.
Facebook and many other tech companies with an online-focused product are often called greedy because of their advertisement practices. However, the ad business that fills their coffers is also what allows them to offer services to millions of us civilians for free. Facebook and other social platforms will be fine despite Apple's imminent changes, so this won't suddenly force a paid version of Facebook, for example. But it does provide the company with an excuse to nickel-and-dime people more and this will certainly affect companies who would otherwise generate profits by running ads on Facebook aimed at Apple customers.
This could play out in tons of different ways and almost every outcome has a direct impact on the user end. Facebook and other companies could choose to back out of the App Store ecosystem entirely, forcing people to use browser-based alternatives. That's almost always a worse experience for the person using the app, and it also negatively impacts other app developers who have Facebook Login and ad hooks built into their apps. Facebook says its research proves simply continuing to advertise through the current method for people who don't opt-out would result in considerable revenue losses. This has been proven true in similar past cases, as well, like when Apple made the same choice for its Safari browser and companies posted massive drops in ad revenue.
Source: Facebook