Facebook advertisers panicked after iOS cut key tracking data

Facebook advertisers panicked after iOS cut key tracking data

Facebook’s ability to track users and show them certain ads seems to be largely thanks to Apple’s “ask no trace” feature, According to to a number of advertisers.

Apple launched a privacy request in late April with iOS 14.5. Since then, nearly half of all iOS devices worldwide have at least version 14.5 installed, according to Statcounter, and a large number of users of these devices have chosen to push Facebook and other apps the ability to track them. Nearly three months after the launch of the feature, only 17 percent of users worldwide voted, according to analytics company Flurry.

Those changes could have a significant impact on Facebook’s bottom line. Eric Seufert, an analyst who wrote the Mobile Dev Memo, predicted that if only 20 percent of users agreed to track, Facebook’s revenue could drop 7 percent in the first full quarter when opt-in requests are active (next third quarter). The company warned in February that iOS changes would reduce its ability to track users across the Internet.

“This is terrible enough for, I’d say, the majority of advertisers,” Seufert told Bloomberg. “The big question is: Are we only seeing short -term volatility where we can expect a step back in a meaningful direction, or is this just normal?”

Settings menu to manage tracking on a per -app basis on iOS.
Enlarge it / Settings menu to manage per -app tracking on iOS.

Samuel Axon

There may be a time before advertisers get an answer to that question. Facebook initially seemed to take a low opt-in step, with media buyers not seeing a significant change. But that seems to have changed in recent weeks, with some buyers reporting that ad effectiveness is starting to decline this month.

Some advertisers, such as ecommerce sites, seem to be very hit. Many retailers run software like Shopify, which shares customer data, including details about purchases customers make on the site, with Facebook. That allows Facebook to refine its “similar” audience, which is accessed by advertisers so they can target others who might be interested in buying the same item.

Before the new iOS feature was launched, media buyers reported that Facebook was able to capture as much as 95 percent of the sales made on their customers ’websites. Now, many media buyers report that Facebook only gets 50 percent of sales. One buyer reported that, with one customer, only 3 percent sales appear in Facebook’s ad manager.

Others visit the ecommerce site without buying anything, and to close the deal, the retailer will “re-target” those users, showing them ads on Facebook for items they saw but didn’t buy. Such ads are not possible with “request not to be tracked” enabled.

“We believe that personalized ads and user privacy can coexist, without the damage caused by Application Tracking Transparency,” a Facebook spokesperson told Ars. “We are also working on our own solutions to help businesses and investing in privacy enhancement technologies designed to minimize the data we process, while still allowing us to display relevant ads and measure ad effectiveness.”

Since users have asked Facebook not to track it, the company’s feedback loop has broken for some of its viewers, thus becoming a major source of data. While iOS doesn’t run on most mobile devices, it has a significant footprint in some of the world’s largest ad markets, including the US. The U.S. market is so important to advertisers that Flurry breaks the nation’s iOS opt-in tracking rates separately. Only 10 percent of U.S. consumers choose to follow, compared to 17 percent worldwide.

By choosing not to follow high prices, US iOS users can have a huge impact on Facebook’s revenue. In the U.S. and Canada last year, the company generated five times more ad revenue per user than the worldwide average. What happens to that figure in the third quarter will show the extent to which tracking chooses to threaten the company’s earnings.



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