While Apple Inc (NASDAQ: AAPL) is preparing to launch its new operating system iOS 14, Facebook Inc (NASDAQ: FB) is setting itself up for a significant downgrade of its Audience Network business. As Facebook has said, Apple’s update could lead to an over 50% drop in its ads revenue.
Besides, Facebook named its Audience Network system “so ineffective on iOS 14 that it may not make sense to offer it.”
Apple’s upcoming iOS 14 will make it harder for companies to track people’s data while using apps. Apple devices offer an “Identifier for Advertisers” (IDFA) that Facebook uses for ad targeting purposes. In iOS 14, the IDFA is an opt-in feature that provides more transparency for users who would prefer not to be tracked in apps and on websites. Developers are now required to get users’ permission before tracking them, which means that it will be difficult to serve them with targeted ads.
iOS 14 vs Audience Network
“This is not a change we want to make, but unfortunately Apple’s updates to iOS14 have forced this decision. We know this may severely impact publishers’ ability to monetize through Audience Network on iOS 14, and, despite our best efforts, may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14 in the future.”
Facebook is also expecting a significant plummet in the Audience Network’s revenue. As the social media giant has estimated, the drop may total as much as 50%.
“While it’s difficult to quantify the impact to publishers and developers at this point with so many unknowns, in testing we’ve seen more than a 50% drop in Audience Network publisher revenue when personalization was removed from mobile ad install campaigns. In reality, the impact to Audience Network on iOS 14 may be much more, so we are working on short-and long-term strategies to support publishers through these changes.”
In addition, Facebook said Apple’s initiative “limits the data available to businesses for running and measuring campaigns.”
Apple unveiled iOS 14 in June. The full launch will take place this fall.
On Wednesday, Facebook stock closed 8.22% up, at $303.91 per share. This price became the new all-time high for FB stock. In the pre-market today, it slightly declined by 0.33% to $302.92. Its market cap is $800 billion. Year to date, FB shares are 48.07% up.
Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.