Apple’s iOS changes hurt Facebook’s advertising business

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The following is an excerpt from Big Technology, a newsletter by Alex Kantrowitz. to put it in your inbox every week You can sign up here..

Facebook sent a senior manager this week to tell customers to stay there. Of course, they didn’t go to the Wall Street Journal to discuss the recent performance of the company’s obnoxious practices. But instead, Facebook VPs including Simon Whitcombe and Graham Mudd told advertisers about Apple’s anti-tracking initiative. This has an immediate negative impact on Apple’s advertising effectiveness and revenue.

A Facebook advertiser who attended the meeting said, “This is where they collect their sh-ts and they move on when it really affects their business.”

“For weeks, everything was out of control,” Mad said in an interview.

Apple is certainly doing more damage to Facebook than any of the scandals it has had in the past. Changes Apple made in iOS 14.5 (asking whether you want to opt out of apps that track apps across the web) are causing confusion for advertisers who use Facebook to keep their business. are dependent. Performance marketers, ie those looking to buy immediately after clicking, are particularly struggling. The public believes that Facebook is choosing to track Facebook, so I’m not sure if people are buying their product after seeing their ad. Facebook expects they’ll spend less money as a result.

“Going completely blind” is how Facebook performance marketer Aaron Paul explains it. According to Paul, his company, Carousel, has transformed from spending millions of dollars a day on Facebook to hundreds of thousands of dollars. Before the change to iOS, Facebook generated 80% of the traffic that Carousel sends to product pages. Now it is 20%.

Apple’s changes to iOS could cause irreparable damage to Facebook’s advertising business. This moment showed Paul and his fellow performance buyers that relying on one channel (albeit a very effective channel) is dangerous. As a result, they are trying to diversify their advertising spend. Paul said he has shifted his advertising budget to some other place, including “silent killers like email, not just Snapchat and TikTok.” Facebook marketers discuss Apple’s changes to Twitter almost unanimous agreement He had to follow.

Concerns over Facebook’s ability to survive attacks from Apple have had an immediate impact on the stock market. The company’s stock price fell nearly 4% on Wednesday, with some loyal investors bailing out. Trader John Nazarian told CNBC on Wednesday that he “probably sold almost half of his positions in the past two days.” He said Facebook was once his second largest holding.

People are falling out of Facebook tracking for reasons: They no longer trust the company with their data, after years of proof they shouldn’t. But the context of Apple’s power transfer is also important. The company is competing with Facebook’s messaging app and is working hard to build its own strong advertising platform.

“I don’t think Tim Cook is this philanthropic privacy custodian,” said Kelsey Lehrich, CEO of 365 Holdings, which owns the e-commerce brand and promotes it online. “They are making strategic decisions that affect market capitalization. Apple did not respond to requests for comment.

“I think we shared our thoughts on iOS 14, but we have nothing more to add at this point,” Facebook’s Mad said, expressing the company’s anger as diplomatically as possible.

Apple’s PowerPlay is already forcing these marketers to turn to Facebook more than any scam. And unfortunately for Facebook, it so happens that Apple is one of the alternatives.

“Apple is very powerful and doing it all to build its own advertising platform,” said Paul, Facebook performance marketer. “My goal is to help our team learn about and become good at advertising platforms. See if it works.”

This post was made before Alex Kantrowitz Big Technology Newspaper.

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