iOS 14 privacy features could result in 50% drop in Facebook’s personalised ads business

There’s good news for iOS users and bad news for Facebook as Apple’s upcoming iOS 14 update will severely reduce the ability the social media platform’s ability to track users across the internet and other apps.

When iOS 14 launches this fall, users will be able to find out how each app tracks them and what data it collects. This means apps that track users for advertising such as Facebook and Google must ask for the user’s permission to opt-in. Users will be prompted by a notification that looks like this:

Faced with a scary message like this, we don’t think many users will be comfortable with the idea of an app tracking you constantly. It is almost certain many Apple users will turn off tracking.

The Menlo Park-headquartered company complained in a blog post that due to Apple’s anti-tracking features, Facebook and its advertising partners will not be able to use Identifier for Advertisers (IDFA) to serve targeted ads to Facebook users.

So you might be wondering what is the fuss about IDFA and how does it work? ArsTechnica explains that IDFA randomly generates a code that Apple assigns to a device. In case you were wondering, Google also does this for Android devices. From there, apps can use the codes to tie together to present a picture of a user’s activity.

For example, a local shopping and weather app might access the identifier. This would then allow Facebook and advertisers to use that cross-app data to place targeted ads for advertisers in other apps. Facebook does this via its Audience Network program which it said its testing showed that there could be a 50% drop in publisher revenue when personalisation is removed.

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The change in iOS 14 forces companies to ask permission before engaging in the use of IDFA renders it useless. As a result of this Facebook apps on iOS 14 that include its main Facebook app, WhatsApp, Instagram and messengers will no longer collect user’s IDFA.

In the post, Facebook said:

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.

This would mean less advertising money for Facebook as the reduced ability to accurately target and measure their campaigns would be a turn off to advertisers. The social media giant expressed displeasure that Apple acted without consulting with Facebook about its preferences.

The company was quoted saying:

“We believe that industry consultation is critical for changes to platform policies… We look forward to continuing to engage” with industry and trade groups “to get this right for people and small businesses.”

Since 2013, Facebook’s ability to track anyone’s online activity, anywhere and tie it together across software and platforms has been a central part of its advertising strategy. Facebook’s handling of its user’s privacy and user data has come under close scrutiny of late. Last year, the social media giant had to settle a USD5 billion penalty with the U.S. Federal Trade Commission over allegations relating to user’s privacy.

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