Facebook's gone on the attack over Apple's coming changes to its Identifier for Advertisers - or IDFA - in iOS 14, which will likely make it much harder for companies to track user activity within apps, as users will be specifically prompted to approve or reject all forms of data tracking.
Facebook has been warning about the impacts of the pending IDFA changes for months, and with Apple expected to launch the update early in the new year, The Social Network is ramping up its opposition, now framing it as an attack on SMBs, with Apple seeing all the benefits.
As per Facebook:
"Facebook is speaking up for small businesses. Apple’s new iOS 14 policy will have a harmful impact on many small businesses that are struggling to stay afloat and on the free internet that we all rely on more than ever."
Facebook says that Apple is behaving anti-competitively by using its control of the App Store to benefit its own bottom line, at the expense of app developers and small businesses.
But is that true?
First off, to clarify Facebook's concern:
Back in June Apple announced coming changes to its IDFA tracking system which would make all data tracking opt-in, with explicit prompts in each app that explain to users what data each app is taking in.
IDFA enables app owners to track user actions within apps. The process cloaks a users' personal information, but still provides data on in-app activity - including transactions, ad clicks, acquisition sequences, etc.
To be clear, users have always been able to opt-out of IDFA tracking, but the settings for such are not readily accessible, and require some digging to find. This new update, within iOS 14, will make IDFA opt-in instead, with new prompts that essentially ask users if they agree to being tracked.
Here's an example of what those prompts will look like:
As you can see here, the prompts will provide more information on how each app is looking to track your activity, as well as a listing of all the data the app could be gathering as you use it.
The messaging and format is a little scary (Facebook calls it a 'discouraging prompt'), and the concern is that the process will freak so many people out that it will render in-app tracking basically useless. Back in August, Facebook said that its Audience Network, which provides targeted ad options on third party websites and apps, could end up being shut down due to the impacts of the change.
As noted, Facebook has been openly criticizing the coming update for months, but now, Facebook is framing it as an attack on small businesses specifically.
Facebook says that the IDFA changes will:
- Force businesses to turn to subscriptions and other in-app payments for revenue, as advertising will inevitably become less effective. That will ultimately benefit Apple, which takes a cut of these in-app elements via App Store policies.
- Limit business' ability to utilize their ad budgets effectively. "Our studies show, without personalized ads powered by their own data, small businesses could see a cut of over 60% of website sales from ads".
- Benefit Apple directly, because its own personalized ad platform isn't subject to the new iOS 14 policy
It's impossible to say, of course, how many people will opt out of in-app tracking, but the impacts, you would assume, will be significant.
How significant? Facebook is estimating that a significant number of people will choose to block data tracking in apps, which will severely hamper ad personalization efforts. That, as Facebook notes, will see more businesses looking to track their audience by other means, like subscriptions, while also making ads less targeted, and less relevant to each user, via mobile apps.
That doesn't seem like an ideal solution, but increasingly, data privacy laws are pushing online platforms this way. Europe's GDPR was the first major policy that put more explicit regulations on how people's personal data can be used, and over time, as concerns have increased around data tracking, and how people can be manipulated by such, more and more nations have sought to provide increased transparency and control over data usage.
In this sense, Apple's IDFA changes are moving in line with broader trends. But they will have impacts, and Facebook stands to lose out as a result.
So is it more about Facebook or SMBs? Well, really, it's more about Facebook and big businesses, the ones who have the capacity to make best use of data tracking via in-depth analysis and high-level ad spend. But small businesses, too, can use Facebook's ad targeting systems in order to reach the right audiences, and maximize their campaigns. So Facebook's not being facetious in its pitch, but it is looking for the most sympathetic angle in order to make its point.
Definitely, that's the slant of its dedicated 'Speaking up for small businesses' website, which shares stories from SMB owners who may be impacted.
The website displays a galaxy of SMB owners who are concerned about the incoming changes. It's a good pitch - but then again, as Bloomberg notes, Facebook's own processes for assisting SMBs are not great, so it presenting itself as a champion for this same group is a little rich.
Facebook has also sought to cut down smaller competitors wherever it can, including its latest project which takes aim at Cameo. In fact, Facebook is currently under investigation over its own anti-competitive practices, so attacking Apple on that front is also a bit of a stretch.
Also, wasn't it Facebook that encouraged businesses big and small to build a presence on its platform, only to then strangle their organic reach, effectively forcing them to buy ads - which, incidentally, exacerbates this current situation?
As such, while Facebook's overall message may not be incorrect, the battle here is absolutely not about SMBs being hurt. It's about Facebook versus Apple, the two tech giants trying to stop one another from taking bigger market share. Realistically, if Facebook were in Apple's position, it likely would have done the same long ago, but now that it's set to feel the impacts, it's looking to push for change.
That doesn't mean Facebook's counter-arguments are wrong, the changes will have an impact on all businesses which utilize data tracking. But SMBs are probably set to feel less pinch than bigger brands. SMBs will still be able to target users based on location, their key focus point, and Facebook will still be able to provide personalization information based on their Facebook profile info. Tracking in-app activity won't reduce SMB targeting as much as others, but overall, the IDFA changes will have an impact.
And no one knows, for sure, just how significant that will be.