Apple will soon require applications to ask users for permission to collect data about the devices they are using and allow ads to follow them across the internet. The social network said Wednesday that those rules could lower what apps can earn from advertising through Facebook’s audience network.
Facebook said it expects “less impact” on its own ad revenue than on ad-supported companies that rely on their audience network to promote their apps. The audience of the Facebook and Instagram advertisers to place their advertisements anywhere on the Internet.
Apple says that the latest version of its mobile operating system, iOS 14, is designed to protect people’s privacy. It will require applications to ask users for permission to collect and share data using a unique code that identifies their iPhones and iPads. The update is scheduled for late this fall.
Facebook said that due to this change, it will no longer collect the identifier from advertisers in its own apps for iOS 14 devices. It is also asking companies to create new ad accounts dedicated exclusively to serving ads for apps for iOS 14 users with the in order to comply with the new Apple rules.
Facebook shares rose more than 5% on the news. Wedbush analyst Michael Pachter said the market believes that Apple’s new rule will likely shift demand towards Facebook’s own targeting system.
Pachter said investors clearly think competing ad networks run by companies like Snap and Twitter are going to be at a disadvantage as titans like Google and Facebook get ahead.
Currently, if an iPhone user looks at an item in the Amazon app and then looks for it in the Best Buy app, advertisers know someone is buying. So they could offer a promotion to that user, Pachter said. Once iOS 14 is released, that won’t be possible unless users subscribe to it.
He also called the targeted ads “a lifesaver for small businesses, especially in times of COVID.”
Apple, on the other hand, said it intends to give people more options about how they want companies to track them on the internet, and the ability to say no if they don’t.
David Chavern, executive director of the news publishers trade group News Media Alliance, said the change is “more annoying than material.” But he added that it could still cost publishers money by making the ads in their apps less valuable to advertisers.
