Facebook's Audience Network revenue on iOS could be slashed by up to 50%, and Facebook isn't happy about it.
- Facebook is saying that Apple's planned privacy protections will severely damage part of its business.
- Apple plans to make it harder for apps to track users' data without their consent in iOS 14.
- Facebook said this could severely hurt its Audience Network ad network, reducing revenue by up to 50%.
- Audience Network is just one part of Facebook's broader ad business, and the company said the changes would also hurt businesses that use it.
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Apple is making it harder for companies to track people's data across apps — and Facebook says it could have devastating effects on part of its business.
On Wednesday, the Silicon Valley-headquartered social-networking giant published a blog post decrying changes Apple has planned for its iOS 14 mobile operating system. Apple intends to prevent apps from tracking users using their unique device identifier, or IDFA, without their explicit permission — something that Facebook's Audience Network uses to personalize advertising in third-party apps.
Facebook said that doing so would have a significant impact on Audience Network, cutting its revenue on iOS by up to 50% because of an inability to deliver more valuable, targeted advertising. It may even force Facebook to stop developing Audience Network for iOS altogether, the company said.
"This is not a change we want to make, but unfortunately Apple's updates to iOS 14 have forced this decision. We know this may severely impact publishers' ability to monetize through Audience Network on iOS 14, and, despite our best efforts, may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14 in the future," the blog post said.
Audience Network is only one piece of Facebook's revenue (it's unclear precisely how much), and its core business of advertising inside its own apps will be unaffected. But any attempt to curtail data collection can pose a threat to Facebook, and the company has recently been vocal about the risks that regulators and platform changes pose.
During a recent earnings call with analysts, company executives argued that Facebook was a "lifeline" for small businesses during the pandemic and that preventing them from effectively targeting people with ads could have dangerous "macro-economic effects."
It's an argument that Facebook reiterated in its Wednesday blog post: "We understand that iOS 14 will hurt many of our developers and publishers at an already difficult time for businesses. We work with more than 19,000 developers and publishers from around the globe and in 2019 we paid out billions of dollars. Many of these are small businesses that depend on ads to support their livelihood."
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