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Bottom line: Facebook's "Audience Network" could be severely crippled by Apple's new privacy features coming in iOS14. Facebook is warning its app developers of a possible drastic or catastrophic reduction in ad revenue for developers. However, the social media titan stands to lose even more income itself if it does not fix the platform to cope with iOS 14's rules.
In June, Apple showcased iOS 14 at its Worldwide Developers Conference. One of the new security features coming to the mobile operating system is better personal information transparency. Not only will developers have to show users how they collect, use, and share their information, but apps will have to ask permission to scrape this data.
Facebook is now notifying app developers that this feature could tank their ad revenue. One of the tidbits of data that apps grab is the device's IDFA. Facebook's Audience Network platform uses this unique identifier for targeted advertisements. If users opt not to share it with an app, the ad tools are rendered useless for the developer.
"While it's difficult to quantify the impact to publishers and developers at this point with so many unknowns, in testing we've seen more than a 50% drop in Audience Network publisher revenue when personalization was removed from mobile app ad install campaigns," the company warned on Wednesday.
According to Facebook, 50 percent is just a conservative estimate. In reality, the impact could be far more significant. The social media giant says that it is working on finding "short- and long-term" mitigations against this, including having new Audience Network and Facebook SDKs available before Apple releases iOS 14. However, it might not be that simple.
Facebook prefaces its post, saying that iOS 14 may hobble Audience Network so much that it might not be worth running on iOS 14 at all.
"Despite our best efforts, [Apple] 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 company said.
Facebook frames the post in the light of making Apple out to be the bad guy, insinuating that it is out to hurt small businesses. While Apple has its share of corporate overbearance, Facebook's excessively zealous data collection does not put it in a position to be pointing fingers. In fact, it could be argued that Apple's upcoming privacy features are a direct result of Facebook's data abuse.
Apple is merely trying to give its users the option to choose which apps to trust with their personal data. Facebook is recovering from an all-time low of consumer confidence over how it handles data thanks to Cambridge Analytica and other information mismanagement scandals. Being in such a position is not Apple's doing.
Regardless of who is at fault, it is up to Zuckerberg and friends to figure out how to proceed because impacts to ad revenue for Facebook app developers ultimately affect Facebook's targeted-advertising cash cow.