Apple's Privacy Changes To Send Facebook's Ad Business Into Dark Ages

Ad industry executives say Facebook will suffer after Apple implements its privacy changes in iOS, as it becomes more difficult for the social media company to collect user data and prove that ads on its platform work.

The challenges include proving performance and measuring the number of people who see ads on mobile phones and take action, and tasks that were more simple in the past decade such as measuring the number of phones that recently installed new apps. These blackouts make it increasingly difficult for advertisers to measure the return on their investments, sending the way brands measure performance into the Dark Ages. 

It took analysts in the advertising industry years to determine how to prove social media's worth. Now on the cusp of Apple's iOS changes, the industry is faced with some of the same challenges as a decade ago. 

Facebook CEO Mark Zuckerberg said on an earnings call this week that “Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own."

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This impacts the growth of millions of businesses worldwide, Zuckerberg said. With the forthcoming iOS 14 changes, many small businesses will no longer have the ability to reach their customers with targeted ads.

"Apple may say that they’re doing this to help people, but the moves clearly track their competitive interests," Zuckerberg said. "And I think that this dynamic is important for people to understand because we and others are going to be up against this for the foreseeable future."

Ad agency Merkle in its Q4 quarterly report noted that spending on Facebook ads, excluding Instagram, grew 12% year-over-year (YoY) in Q4 2020, similar to growth seen in Q3, Facebook impression growth fell to 2% YoY, following a similar seasonal pattern as in 2019. CPMs saw YoY increases for the first time since the first quarter of 2020.

That could change if advertisers find it increasingly difficult to measure performance.

Facebook will try to combat Apple's changes with something the social media platform calls Aggregated Event Measurement, which allows for measurement of web events from iOS 14 devices. The social media site also posted advice on how to optimize ads for conversion events that occur in a brand's business’s app.

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