Facebook’s ad revenue to be hit by Apple’s privacy changes

By Amirtha P S, Desk Reporter
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The US-based social media giant, Facebook has issued a rare mid-quarter update to investors saying that Apple’s iPhone privacy changes, which allow users to block tracking, have significantly affected its advertising revenues because less data could be collected.

Facebook’s product marketing Vice President Mr. Graham Mudd issued the warning in a blog post stating that “the cost of achieving your business outcome may have increased and it’s also gotten harder to measure your campaigns on our platform. In some cases, this is due to underreporting on our part. We believe that real-world conversions, like sales and app installs, are higher than what is being reported for many advertisers.”

Facebook has publicly spoken out about its App Tracking Transparency concerns many times. App Tracking Transparency was added with iOS 14.5 earlier this year. With this change, Apple requires developers to ask permission from users before tracking them across other apps and websites.

Apple’s latest update to its operating system is intended to make it harder for advertisers to track people as they rotate between different apps on their devices. People will be given the option to opt in or out of app tracking. This will restrict how technology companies like Facebook and Google gather data for advertising purposes.

Facebook said the iOS privacy changes will also adversely affect its earnings in the third-quarter ending on September 30. “We expected increased headwinds from platform changes, notably the recent iOS updates, to have a greater impact in the third quarter compared to the second quarter. We know many of you are experiencing this greater impact as we are,” said Mr. Mudd.

In the company’s July earnings call, Facebook’s chief financial officer Mr. David Wehner warned about the potential negative impacts of the iOS privacy changes. The social media giant’s net profit surged to $10.4 billion in the three months to June 30, almost 9.4 percent up on a quarterly basis. Revenue during the period rose 56 percent to more than $29 billion

Facebook has also recommended a series of measures for advertisers to better analyze their ad performance. The company said it will introduce new tools to help advertisers with delivery effectiveness and measurement.

“Consider waiting for a minimum of 72 hours or the full length of the optimization window selected before evaluating performance for conversion-optimized campaigns. Daily assessment is still possible for campaigns but waiting will ensure you get the most accurate picture of performance,” said Mr. Mudd.

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