Facebook published a statement that Apple’s upcoming operating system iOS 14 could lead to more than a 50% drop in its Audience Network advertising business.
Facebook, which relies almost totally on advertising for income, had previously warned that Apple iOS 14 could impact its advertising business, but Facebook’s blog post on Wednesday outlined how serious that impact could be. The Facebook Audience Network allows mobile software developers to provide in-app advertisements targeted to users based on Facebook’s data.
Today, advertisers can use a unique device ID number called the IDFA to better target ads and estimate their effectiveness. In iOS 14, each app that wants to use these identifiers will ask users to opt in to tracking when the app is first launched. Facebook said its apps will not collect IDFA information on iOS 14.
Facebook says more than 1 billion people see at least one Audience Network ad every month, although many of those are probably using Android phones and will not be affected by the change. Facebook derives nearly all of its revenue from advertising, but it’s not known what percentage is attributable to the Audience Network versus ads on Facebook and other properties.
“There are a few things our partners should know to prepare for iOS 14. First, we will release an updated version of the Facebook SDK to support iOS 14. The new version of the Facebook SDK will provide support for Apple’s SKAdNetwork API, which limits the data available to businesses for running and measuring campaigns. In light of these limitations, and in an effort to mitigate the impact on the efficacy of app install campaign measurement, we will also ask businesses to create a new ad account dedicated to running app install ad campaigns for iOS 14 users,” wrote Facebook.
“We expect these changes will disproportionately affect Audience Network given its heavy dependence on app advertising. Like all ad networks on iOS 14, advertiser ability to accurately target and measure their campaigns on Audience Network will be impacted, and as a result publishers should expect their ability to effectively monetise on Audience Network to decrease. Ultimately, despite our best efforts, Apple’s updates may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14. We expect less impact to our own advertising business, and we’re committed to supporting advertisers and publishers through these updates.”
Apple has not said when iOS 14 will launch but it’s expected to occur late this year.
Facebook shares increased more than 8% on Wednesday despite its announcement.