In a recent CNBC article, a former Facebook insider explains why Facebook is so worried about an upcoming privacy update to Apple’s mobile operating system for iPhones and iPads.
CNBC reports that Facebook has been running an intense campaign to defend its targeted advertising features in recent months in an attempt to get ahead of an upcoming iOS 14 security update. Facebook has gone as far as to run an ad campaign in defense of personalized advertisements, arguing that they are essential to small businesses.
At the center of this battle is a unique device identifier on every iPhone and iPad called the IDFA. Facebook and other tech firms selling mobile advertisements rely on the IDFA to help target ads to users and estimate how effective they are.
With Apple’s new iOS 14 privacy update, apps that want to use the IDFA will have to ask users to opt in to tracking when the app is first launched. If a user opts out, Facebook’s mobile ads will become less effective. Facebook has now warned its investors that these changes could hurt its advertising business as soon as this quarter.
CNBC spoke with a number of former Facebook employees who have worked on the company’s ad products and businesses and explain why Facebook is so worried about this issue.
CNBC reports:
Most critically at stake for Facebook is what’s known as view-through conversions. This metric is used by ad-tech companies to measure how many users saw an ad, did not immediately click on it, but later made a purchase related to that ad.
Think of view-through conversions like this: You’re tapping through your Instagram stories and you see an ad for a pair of jeans. You don’t tap the bottom of the ad for more information because you’re busy checking out what your friends are up to, but the jeans were cute. A few days later, you go on Google, search for the jeans you saw on Instagram and buy them.
After the purchase is made, the retailer records the IDFA of the user who bought the jeans and shares it with Facebook, which can determine whether the IDFA matches with a user who saw an ad for the jeans. This shows the retailer that their Facebook ad worked.
If Facebook loses access to this data, it could severely negatively affect its advertising businesses. If advertisers are no longer able to accurately measure the effectiveness of their Facebook or Instagram ads, they may consider moving their budgets to other apps and services whether the return on their investment is more visible.
CNBC asked a group of former employees if the IDFA change will impact small businesses as negatively as Facebook claims it will, the former employees gave mixed answers. With less tracking data available, Facebook will find it harder to target ads as effectively as it did before, so yes small businesses could be affected.
However, many small businesses may not even notice the change. Many small businesses, such as retailers or coffee shops, target their ads to broad categories such as an age range and a distance range. This type of data Facebook would be able to continue to collect even without access to a user’s IDFA.
Henry Love, a former employee on Facebook’s small business team, stated: “If you talked to any restaurant owner anywhere and asked them what IDFA is, I don’t think any of them would know what that is. It’s affecting Facebook at scale. Not the small business owners.”
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com
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