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The newest update for Apple’s mobile operating system (iOS 14.5) is perhaps the biggest one in recent years. And especially for companies like Facebook, which are already taking precautionary and preventative steps to help advertisers find workarounds for Apple’s new privacy tools present in iOS 14.5. If you believe the hype, all of the new privacy updates in iOS 14.5 are going to be very bad news for Facebook. So just how bad is the new Apple iOS update for Facebook’s advertising ecosystem?
The one big change in iOS 14.5 that scares Facebook
The one update in iOS 14.5 that everyone is talking about, of course, is called App Tracking Transparency. Basically, if you are using an app on your iPhone, it will now need to alert you that you could be tracked by advertisers. A window will constantly pop up anytime you open the app, asking for your permission to track you. As you can imagine, most people are probably going to say, “Nah, not this time…” In the past, it was a lot harder and more complex to turn on privacy settings. Now, the option to change privacy settings will be front-and-center anytime someone opens an app.
And that’s why the new update – which might seem relatively simple and straightforward to non-advertisers – has Facebook so scared. You see, Facebook relies on all the information that it collects from your app and web browsing experiences, so that it can show you the most highly-targeted ad possible within Facebook. The more that Facebook knows about your shopping and browsing habits, the more easily it can craft the perfect ad for you. So… if people aren’t getting tracked, Facebook is not going to be able to offer advertisers the same value proposition. As a result, some advertisers might decide to go elsewhere. And that’s going to represent a direct hit to Facebook’s bottom line.
So, facing a potentially disastrous scenario (at least, from the perspective of delivering targeted ads), Facebook is apparently pulling out all the stops. Facebook has already run full-page ads in major newspapers, claiming that the changes to Apple’s mobile operating system are “harmful to small business.” From Facebook’s perspective, the way that small businesses can bring in new customers and survive in the post-pandemic world is by using targeted ads. If those ads aren’t available, then those same small businesses are going to wither and die. At least, that’s the narrative that Facebook wants you to hear, so that consumers start to push back against Apple in support of small business.
Also, fearing that this direct attempt to change the media narrative around privacy might not work, Facebook is also rolling out all kinds of precautionary and preventative measures designed to keep the advertising dollars rolling in. For example, Facebook is informing companies how to make slight adjustments to their ad buying mechanisms and data tracking tools in order to get around Apple’s privacy tools.
Presumably, too, there’s a lot of work going on in the Facebook developer ecosystem to circumvent Apple’s privacy tools altogether. The most controversial of these practices is known as “fingerprinting,” and it relies on gathering specific data about the device you are using while online to identify you. Each device has its own unique fingerprint, so even if you don’t opt in to tracking, a company can still track you indirectly. It takes a bit more effort, but it can be done.
The future of social media advertising at stake?
At the end of the day, Apple’s business model does not rely on advertising dollars, but Facebook’s does. Thus, Apple is not adverse to making privacy-related changes to its products that are anti-advertiser. If it means Apple will sell a lot more iPhones, why not? Apple doesn’t care about Facebook’s advertising business and Mark Zuckerberg’s ability to make billions of dollars. Facebook, on the other hand, views every change to iOS as a potential fatal blow.
So this is getting interesting. All the momentum seems to be on the side of privacy advocates. And sentiment seems to be shifting against Facebook, while Apple remains a media darling. So, for now, it looks like Apple really is going to make Facebook sweat this one out. Sometime soon, we might just get an entirely new social media advertising paradigm, whether Facebook likes it or not.