Facebook issued a statement Wednesday on the likely impact of iPhone's iOS 14 operating system, and its impact on in-app advertisers and publishers.
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.
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.
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.
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.
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