As Apple prepares to implement application tracking transparency changes in iOS 14.5, CNBC talked to several former Facebook employees for details on why Facebook has been so strongly opposed to planned privacy updates.
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Starting this spring, Facebook and other app developers will need to obtain express permission to access a user’s advertising identifier, or IDFA, which is used to track usage in apps and websites for the purpose of ad targeting. Facebook has made a strong campaign against Transparency in tracking applications, removing full-page ads from newspapers and trying to position Apple as an enemy of small businesses.
One of Facebook’s main arguments is that Apple’s changes will hurt companies that use Facebook’s advertising tools, but former Facebook employee Henry Love said CNBC that for many companies, the change may not even be noticeable.
Less ad tracking data will prevent Facebook and its customers from targeting ads as effectively as they can now, but many companies may not need a lot of data for effective ad targeting. A small coffee shop in Texas, for example, probably uses broad targeting categories, such as zip code and age range for ads, which is data that Facebook can collect from its own apps without the need for IDFA.
“If you spoke to any restaurant owner anywhere and asked what IDFA is, I don’t think any of them would know what it is,” said Love. “It is affecting Facebook on a large scale. Not small business owners.”
Among the few “small business owners” who can feel the effects of the IDFA shift are start-ups backed by venture capital money who have hired professionals with the skills to target sniper-accurate users, Love said.
People who target users on mobile, web and Facebook Audience Network with IDFA “are not small businesses”, with Love calling these companies “sophisticated startups supported by VC”.
App tracking transparency will threaten view-through conversion tracking through Facebook, a metric that allows advertising companies to find out how many people saw an ad, didn’t click on it, but then made a purchase related to the ad. Retailers can record the information of the person who purchased an item and then share it with Facebook, with Facebook able to determine whether that person’s IDFA matches a user who saw an ad for the product they purchased.
CNBC says that the loss of that information can have a major impact on Facebook, because if advertisers cannot accurately measure the effectiveness of Instagram and Facebook ads, they can shift a larger share of their budget to other apps and services.
Facebook’s Audience Network, which provides ads on non-Facebook apps, will also be affected because it uses IDFA data to choose the best ads to show users based on Facebook data. If users choose not to share the IDFA, Facebook ad customization efforts will be futile outside of their own applications.
Facebook is planning to ask users for permission to access IDFA and is testing text that suggests that tracking will provide a better ad experience. Facebook’s test prompts encourage customers to allow the use of IDFA to “support companies that rely on ads to reach customers”.