With iOS 14, Apple is introducing new privacy and tracking features that may collapse Facebook’s business model on iPhones. With the latest update, Apple will give its users the ability to deny the tracking request from apps which use an unique identifier.
After the iOS 14 update, the users will get a pop-up dialog box asking them if an app can track them. If the users click on ‘No’, Facebook will then not be able to collect the appropriate data which it used to, using those identifiers. This will also have a negative effect on its Audience Network ad platform for developers.
As a result, Facebook has announced in a blog post, that it will not collect IDFA from its own Facebook app installed on devices running in iOS 14. You may ask what is IDFA? It stands for ‘Identifier for Advertisers’ which helps companies like Facebook to track advertising on particular devices. This number helps them recognize if that particular app for which the ad was shown, got installed on the device successfully by the user or not.
The company exclaims that this change of not collecting IDFA is a forced decision because of the privacy changes Apple has made in iOS 14. This doesn’t mean that Facebook will not show ads. The app will still show ads but those will now be less relevant. In the testing so far, Facebook says that they have seen a 50% drop or even more, in Audience Network ad revenues.
In the blog post, Facebook said “For developers and publishers using Audience Network, our ability to deliver targeted ads on iOS 14 will be limited. As a result, some iOS 14 users may not see any ads from Audience Network, while others may still see ads from us, but they’ll be less relevant. Because of advertisers’ reduced ability to accurately target and measure their campaigns, app developers and publishers should expect lower CPMs on Audience Network and likely other ad networks on iOS.”
The blog post also read: We expect these changes will disproportionately affect Audience Network given its heavy dependence on app advertising. 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. 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 is more concerned about the other businesses that rely on its Audience Network.
While this move is positive for iOS users as it gives them more control over their own privacy, it’s a negative for businesses as their revenues will severely cut down.