Apple debuted App Tracking Transparency with iOS 14.5 update earlier this year. Since the feature’s release, big tech companies have been worrying about the effects of the feature on their advertising revenue. Now, according to a new report from Bloomberg, Facebook is ‘panicking’ over the long-term effects of ATT.
The new report from Bloomberg highlights that only 25% of the people are allowing apps to track their usage. The research was conducted by the mobile app analysis firm Branch. The report highlights that advertising agencies are most hurt by Apple’s move.
App Tracking Transparency in the latest iOS updates prevents advertisers and developers from tracking a user’s app usage and thus limiting them from showing personalized ads to the user.
The report highlights Facebook in particular. It says that the “media buyers” who manage Facebook ad campaigns for many businesses are “no longer able to reliably see how many sales its clients are making, so it’s harder to figure out which Facebook ads are working.”
One of the factors for Facebook to measure ad tracking was to see how many people return and buy things they once saw in an ad. They call this tracking “re-target ad tracking.” This, too, is no longer visible in the latest ATT update.
According to the report, this iOS change could cause Facebook’s ad revenue to drop by 7% if around 20% of the iPhone users allow app tracking. The revenue would fall 13.6% if 10% of the iPhone users allow app tracking on Facebook.
“Gil David, a media buyer at Run DMG who spends about $1 million on Facebook ads per month for clients, said the company used to know about the vast majority of his client’s sales. Now that data is inconsistent. With one larger client, Facebook captured just 64% of sales. With a smaller client, just 42%.”
The report has cited several examples of the business and ad agencies being affected by the major iOS change.
“Those bootstrapped advertisers or those advertisers that are trying to start from scratch to enter the market are going to have a much tougher time than a venture-backed company or somebody that’s more established,” said Maurice Rahmey, co-founder of a performance marketing firm called Disruptive Digital.”
“There’s no source of truth at all anymore,” said Dave Herrmann, who runs his own agency called Herrmann Digital and manages more than $2.5 million in monthly Facebook advertising spend. “Every platform gives you different numbers.”
Facebook isn’t the only one who’s worried about App Tracking Transparency. Ali baba is also said to be ‘fretting’ over the iOS update. Snap, the company which owns Snapchat, is said to be developing a feature that would bypass ATT.
Have you enabled ATT on your iPhone yet? Do you see the changes in ads in apps such as Facebook, Twitter, and Instagram? Let us know in the comments section below![Via Bloomberg]