Since Apple is ready to implement the transparency changes of app tracking in iOS 14.5, CNBC spoke to several former Facebook employees to get details on why Facebook was so strongly against the planned privacy updates.
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From this spring, Facebook and other app developers will need to get explicit permission to access a user’s advertising ID, or IDFA, used to track the use of apps and websites for advertising purposes. Facebook has fought fiercely against the transparency of tracking information, by pulling out full-page newspaper ads and trying to position Apple as an enemy of small businesses.
One of Facebook’s main arguments is that the changes will hurt Apple’s businesses that use Facebook’s advertising tools, but Henry Love, a former Facebook employee. CNBC that the change for many businesses is not even noticeable.
Less ad tracking data will prevent Facebook and its customers from targeting ads as effectively as possible, but many businesses may not need much data for effective ad targeting. A small coffee shop in Texas, for example, probably uses broad target categories like zip code and age group for ads, these are data that Facebook can collect from its own apps without 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 it is,” Love said. “It affects Facebook on a large scale. Not the small business owners.”
Among the few “small business owners” who may feel the effects of the IDFA change are ventures backed by venture capitalists who have hired professionals with the skills to target users with a sharpshooter precision, Love said.
People who target users on the mobile internet, the internet and the Facebook audience network with the IDFA are ‘not small businesses’, and the charity calls such companies ‘sophisticated, VC-supported startups’.
App tracking transparency poses a threat to Facebook’s conversion tracking, a measure by which advertising companies can find out how many people see an ad, not click on it, but later make a purchase related to the ad. Retailers can record the information of the person who purchased an item and then share it with Facebook, with Facebook being able to determine if the person’s IDFA matches a user who saw an ad for the purchased product.
CNBC says that the loss of this information can greatly affect Facebook, because if advertisers can not accurately measure the effectiveness of Instagram and Facebook ads, they can shift more of their budget to other programs and services.
Facebook’s audience network, which offers ads in non-Facebook apps, will also be affected because it uses IDFA data to select the best ads to show users based on Facebook data. If users do not want to share IDFA, Facebook’s attempts to customize ads outside of its own apps will be rendered useless.
Facebook plans to ask users for permission to access the IDFA, and it is testing the wording that suggests the detection will provide a better advertising experience. Facebook test leads encourage customers to allow IDFA usage to ‘support ad-based businesses to reach customers’.