Facebook has heavily criticized Apple for its upcoming anti-tracking ad changes. The company has published full-page newspaper ads that put Apple in a bad light, with Zuckerberg even claiming that this move will be disastrous for small companies.
Apple, however, plans to roll out its privacy-focused changes with the upcoming iOS 14.5 update. One of the talked features of this update is app tracking transparency, which would force developers to ask users if their app usage can be tracked for ad targeting purposes. Facebook, however, has made a lot of noise about Apple’s anti-tracking feature, it has not exactly mentioned how the changes will affect businesses.
CNBC spoke to former Facebook employees in a bid to find out how the upcoming iOS 14 anti-tracking changes will affect Facebook’s ad platform. Facebook, like most social media websites, relies on selling ads as a part of its revenue. Apple, before iOS 14, allowed these advertisers to collect an identifier called IDFA to identify which device actually made a purchase through ads.
“After the purchase is made, the retailer records the IDFA of the user who bought the jeans and shares it with Facebook, which can determine whether the IDFA matches with a user who saw an ad for the jeans. This shows the retailer that their Facebook ad worked.”
But, Facebook employees say that the companies that rely on IDFA for ad-conversion are “sophisticated, VC-backed startups.” They say that a small business is likely to use a different approach for ad targeting. Citing an example, he said that a small coffee shop in Texas is likely to use a broad targeting categories like pin code and age for ads, which is data that Facebook can collect from its own apps without the need for the IDFA.
“If you talked to any restaurant owner anywhere and asked them what IDFA is, I don’t think any of them would know what that is,” Love said. “It’s affecting Facebook at scale. Not the small business owners.”
The app tracking, however, will threaten Facebook’s metric known as “view-through conversion.” This figure enables the company to track how many people saw an ad, did not click on it, but made a purchase related to the ad at a later stage. CNBC says that app tracking transparency will affect this aspect of Facebook ad-tracking, and in turn its revenue. This is the main reason why Facebook is asking users to enable app tracking, by the use of an information pop-up.[Via CNBC]