Apple and Facebook have clashed over the need for app developers to secure permission to collect user data, and the dispute is likely to have major ramifications for brands and publishers.
Having already adjusted strategies to comply with privacy regulations including GDPR in Europe and CCPA in the US, advertisers were next mulling over the implications of Google’s decision to phase out third-party cookies from its Chrome browser. Now they must reassess how best to target Apple device users.
Some background: At Apple’s annual developer conference in June, the company revealed that its newest operating system – iOS 14, due for release later this year – will require app developers to explicitly ask iPhone, iPad and Mac users to opt-in to sharing a unique device code, the IDFA (ID for advertisers). This is potentially problematic, because advertisers use the IDFA to target audiences and track the effectiveness of campaigns.
Facebook’s response: The social network has argued that Apple’s decision will have a chilling impact on the digital advertising market. In a blog post last week, Facebook said it would stop collecting the IDFA on its own apps on iOS 14 devices. It has issued a new version of its SDK (software development kit), which will limit the data available to advertisers. Furthermore, Facebook revealed that it may be forced to pull its Audience Network for iOS 14 entirely.
The upshot: Audience Network is an ad network allowing marketers to run ads on tens of thousands of third-party apps. According to Facebook, the effectiveness of running ads on this network is predicated on the ability to target audiences with relevant messages.
A test for mobile install ads comparing personalised and non-personalised rankings found a 50% drop in publisher revenue. As a result, Facebook has concluded that the new policy may render Audience Network “so ineffective” that it does not “make sense” to offer it on iOS 14.
“This is not a change we want to make, but unfortunately Apple’s updates to iOS14 have forced this decision,” Facebook wrote in a separate post. And that decision, it emotively suggests, will impact many businesses dependent on ad revenues “to support their livelihood”.
A game of chess: While publishers fear a deflation in CPMs, Facebook is warning that advertisers will see an erosion in their capacity to target audiences at scale, as well as their ability to accurately measure campaigns.
Needless to say, some of this hyperbole can be filed under gamesmanship. Facebook fears a threat to its revenues, and so is highlighting the impact it may have on the media market – not least at a time when others, including Fortnite-publisher Epic Games, are accusing Apple of monopolistic behaviour.
However, Facebook is by no means the only complainant: DMG, owner of the Mail Online, has threatened to delete its iOS app if Apple goes ahead with the changes.
The bigger picture: While Facebook’s protest is undoubtedly designed to generate a backlash among the app developer community against the iOS 14 launch, the move points at three broader trends.
The first is Facebook’s role in the advertising ecosystem. Privacy campaigners – and many users themselves – will likely cheer a reduction in the social network’s ability to stalk users around the internet, and sympathy for any reduction in ad revenues will likely be in short supply. As a result, it has positioned itself as a champion of the ‘little guy’, i.e. app developers who need the ad revenue to make ends meet.
Secondly, at a time when regulators and campaigners are pushing towards a system of privacy and consent ‘by design’ in data collection, marketers may be concerned that Facebook has such little faith in the likelihood of users opting in to such arrangements.
Finally, as the walls of the open web crumble, and the cookie fades from view, this spat hints at the greater complexity to come. The system that enabled advertisers to track consumers across the web, and deliver what they considered to be relevant messages at the optimal moment, is coming to a close. In its place will be a messy assortment of deals, counter-deals and compromises – and perhaps, ultimately, the decline of digital ad personalisation itself.
Sourced from Campaign, The Verge, AdExchanger, Ars Technica; additional content by WARC staff