The hits just keep on coming for Facebook’s ad ecosystem. The roll-out of CCPA in July caused havoc for advertisers, and Facebook is now proactively warning of a new potential disruption: the roll-out of iPhone’s iOS 14 next month.
To understand this change, there are a few moving parts.
The IDFA & How It’s Been Used
Apple uses the “IDFA” (Identifier for Advertisers) as the tracking mechanism for iPhone users. It logs things like apps opened, what was interacted with – essentially, it’s their cookie.
Advertising platforms rely on that data to discern interests and user actions. This powers how ads are targeted. It’s especially relied on by app and gaming companies, who show ads on their sites via Facebook’s Audience Network.
IDFA Privacy Changes
The IDFS was always a default that existed for iOS users, but Apple announced earlier this year it’s becoming an opt-in mechanism. In other words, users wouldn’t be tracked by default anymore.
This means it becomes an opt in option for users, who will be asked if they give permission for the data to be shared. If they don’t, that data won’t exist for targeting, making effective ad placement an uphill battle. Less ads placed on the Audience Network means less ad revenue for the publishers who show them.
What This Means for Facebook
One of Facebook’s placement options is the Facebook Audience Network:
This placement relies heavily on ad placements within apps, which app owners use as a monetization strategy. The IDFA data works with Facebook’s SDK token, the tracking mechanism for in-app data and actions.
Facebook is warning these publishers to brace themselves. A loss in targeting capability will have a ripple effect on ad inventory, which means less money for the app publishers monetizing this way. In their tests, they saw revenue plummet 50% for publishers when ad personalization was removed.
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 statement
Facebook comments they expect their own advertising revenue to be less severely impacted. The majority of Facebook’s inventory comes from Feeds, with Audience Network representing a smaller amount of the revenue pie overall.
What Facebook is Doing
There are several steps Facebook is taking to address this change, mostly involving treating iOS 14 users as a different batch versus older iOS versions.
First, Facebook will not be collecting any of its own app data for users on iOS 14. This will keep them out of hot water by removing any chance for a grey area of data collection. They note this may change as they continue to work with Apple, and the rules become clearer.
Second, Facebook is asking advertisers running app install campaigns to create a new, separate ad account specifically for target iOS 14 users. They can keep their current accounts that target previous iOS versions, along with those targeting Android users.
Third, an updated version of their SDK will be released. While Apple hasn’t confirmed a date for iOS 14, Facebook will be releasing this update prior to the iOS 14 roll-out. They have not confirmed a date yet.
Facebook’s Positioning on Apple
The tone of Facebook’s statements are notable. The change hints that Apple is forging ahead with a decision likely to damage publishers, with little cooperation.
We understand that iOS 14 will hurt many of our developers and publishers at an already difficult time for businesses. We work with more than 19,000 developers and publishers from around the globe¹ and in 2019 we paid out billions of dollars². Many of these are small businesses that depend on ads to support their livelihood. – Facebook statement
Facebook’s official statement is here, with a supporting blog post here.
Apple has announced they will be delaying the launch of IDFA to early next year, in order to give developers more time to make necessary changes.