Facebook: Privacy features in iOS 14 can lead to a major drop in sales
Facebook warns developers that iOS 14 could lead to a drop of more than 50 percent in their revenues. In the new operating system, users must opt-in to receive personalized ads.
Facebook is warning developers in a blog post about upcoming changes to Apple’s mobile operating system. IOS 14 users will now have to opt-in to share their IDFA, the Identifier for Advertisers, with advertisers when they open an app. The IDFA is used by Facebook, among others, which uses the id to display advertisements in other apps. This is done via the Facebook Audience Network. Because the IDFA is also read by other apps, advertisers can personalize their ads based on user behavior. Previously, the ID was shared by default, but in iOS 14, users must explicitly give permission when opening an app for the first time.
Facebook writes in its blog post that it must comply with Apple’s rules. This can lead to problems for the company and for advertisers using the Audience Network. “For developers and publishers, the ability to show targeted ads on iOS 14 will be limited. As a result, some iOS 14 users will no longer see Audience Network ads at all, and others will see ads that are less relevant.” Facebook warns that developers can get less revenue as a result. The cost per mille, or the income per thousand views, then decreases.
According to the social network, it is difficult to estimate exactly how big the consequences will be. The company does refer to a study it conducted earlier this year. It shows that stopping personalized ads can lead to a revenue decline of more than fifty percent, at least for ads in mobile apps. The company says it is considering a long-term solution and that the implications for the Audience Network “could be much greater,” although Facebook does not elaborate on that.
IOS 14 will be released later this year. The final release date has not yet been announced. For the time being, the consequences for advertisers only apply to Apple’s operating system. An opt-in for an advertiser identifier is not yet available on Android.