Unregulated data can be dangerous as brands get access to user information, but the tables were turned when with a clean sweep (or 14.5 update in 2021) Apple empowered its users to protect their privacy if they so wish. This is done using a simple opt-in prompt on every app and allows users to give or withhold consent to third-party sites such as Facebook to track their user data. What the feature essentially does is that it blocks tracking of their info resulting in less data in the hands of advertisers and thus less revenues. This also means that targeted advertisement (tracking who is the brand’s TA and targeting them instead of the entire spectrum) would take a massive hit. We have earlier delved into how AI helps brands in leveraging user data. But what followed Apple’s data privacy move was the inability of the advertiser to know if the Facebook users visited their site, made a transaction or purchase, and ultimately in measuring the quantum of effectiveness of the ad campaign they ran on the platform. As per Facebook the data protection features launched by Apple have impacted its ad revenues. Facebook even went on record saying the impact of this feature on ad investment has been much more than expected by advertisers and said it would now be harder to measure ad campaigns on the platform besides increasing the cost of achieving business outcome via Facebook ads.
Technicalities aside, how businesses got impacted is a grave tale. According to data from AppsFlyer’s Performance Index 14 comparing H2 2020 to H2 2021, a quarter of total budgets shifted from iOS to Android due to Apple’s move. The shift in average ad spend dip was between 10% to 15%. One look at the numbers shows how big the impact has been. As per analyst Michael Nathanson, Facebook is bound to generate USD 129 billion in ad revenue in 2022 implying an ad business growth of just 12 % this year, as agaonst 36 % in the previous year.
Facebook’s response to the situation to make things right for the advertisers is what it calls ‘aggregated event measurement’ till a better fix is found. While Facebook will still not be able to tell advertisers which individuals clicked on a link or downloaded an app upon seeing an ad, it can tell them what a larger group of users did. What Facebook does in future, remains to be seen.
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