Apple's recent IOS changes are hurting Facebook's digital ad personalization business
Apple and Facebook are two of the biggest Technology companies on the planet and generate their revenue in different fashions, Apple through the sale of devices and Facebook through targeted online advertising.
They have remained in separate lanes for years however recently their interests have started to overlap and at the core of it is how they think about the privacy of their users.
Apple strikes a blow to advertisers
On April 26th Apple released the IOS 14.5 update for iPhones and iPads. On the surface it seems like just another update in a slew of many from the Tech giant. However it included a change that requires app developers to explicitly ask for permission to track users' behavior across Apple's App Store and the internet. This directly impacts Facebook as its highly successful targeted advertising business model over the last decade has relied on being able to do exactly this.
Differing opinions on privacy
The disagreement between Apple and Facebook has been widely publicized and continues to escalate. Apple, stemming from the Steve Jobs' era and continued by Tim Cook, believes that privacy is a human right and wants to provide users with transparency and control. Facebook's counter is that this hurts small businesses - "every business starts with an idea, and being able to share that idea through personalized ads is a game changer for small businesses".
What's changing for advertisers?
The changes are heavily centred around tracking and targeting of users. The way in which Facebook and other advertisers do this is through the use of IDFAs. IDFA (Identifier for Advertisers) is a unique identifier for mobile devices and is used to target and measure the effectiveness of advertising on a user level across mobile devices.
Early indications suggest that users are now sharing their IDFAs with app publishers at a greatly reduced level (roughly 10% compared to 70% previously).
What's changing for users?
Ultimately users will see a pop up once they install a new app which gives them the ability to opt out from sharing their IDFA with app publishers. If they choose to opt out then the ads they see will just not be personalized to them and potentially irrelevant.
There's a fundamental difference of opinion between Apple and Facebook on privacy and it's being magnified as Apple increasingly releases features, with privacy at their heart, that have an adverse impact on Facebook's business.
Companies, in order to protect themselves from the fallout from this spat should start to focus their efforts on building up first party data on their customers (here). Data collected directly from their own customers will be key to ensuring that any Marketing activities are uninhibited by further industry changes (e.g. Google getting rid of 3rd party cookies) or future regulatory changes. For advice or help with implementing your first party data strategy, get in touch with Dataships here and we'd be happy to help.