Apple has become even more aggressive since launching iOS 14 with its privacy policy, which added several new features to let users control how third-party apps use their data. Facebook has criticized these changes, and now some former employees have explained how the privacy features of iOS affect the company.
Apple is working on a new feature called App Tracking Transparency that will be introduced to all users with iOS 14.5 this spring. Once this feature is launched, apps will no longer be able to track users between other apps and websites without requiring user permission. Of course, Facebook is not happy about this, because the social network relies on ads for its revenue.
CNBC spoke to some former Facebook employees who outlined exactly how the company will be affected by Apple’s new privacy policy. Like other platforms that sell ads, Facebook uses something called ‘view-through conversions’ to measure how many users saw an ad and did not immediately chat with it, but later made a related purchase.
After the purchase is made, the retailer picks up the IDFA from the user who purchased the jeans and shares it with Facebook, which can determine if the IDFA matches a user who saw an ad for the jeans. It shows the merchant that their Facebook ad has worked.
The Identifier for Advertisers (IDFA) also provides a lot of information to Facebook and advertisers about the user who spoke to the ad, which also helps them determine to which users a particular ad will be displayed.
With the transparency of app tracking in iOS 14, users can withdraw it to include the IDFA on Facebook, which will make it difficult to measure whether the ad was successful. This could lead to fewer advertisers using Facebook apps to promote their products and services, which will definitely cause the business to lose money.
The company also fears losing advertisers to Google, which currently has the largest online advertising platform with Google Ads.
Facebook is the number two recipient of online advertising dollars behind Google. A specific threat is that advertisers will pour more money into Google’s search advertising business, which Facebook cannot duplicate, and which targets users during the conversion.
Facebook has attacked Apple with campaigns saying that privacy changes in iOS 14 will harm small businesses, as many of them use Facebook’s platforms to advertise their products and services. However, a former Facebook employee argues that these changes may not affect small businesses, as these businesses are usually located in specific cities or states, making it easier to determine the target audience of the ad without using IDFA trackers .
For example, if you run a small coffee shop in Austin, Texas, you may not need too much data to target your ads, said Henry Love, a former employee of Facebook’s small business team. A business like this usually limits its target to fairly broad categories – for example: an age range and a distance distance from a specific zip code allows them to target ads to Facebook users in their vicinity.
“If you talked to any restaurant owner anywhere and asked them what IDFA was, I don’t think any of them would know what it was,” Love said. ‘It affects Facebook on a large scale. Not the small business owners. ”
Facebook does not appear to be trying to disobey Apple, but the company will try hard to persuade its users to enable the tracking option with iOS 14.5 – which is expected to be released later this month.
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