Apple’s iOS 14 will have a great impact not just on Facebook advertising revenue, but also on small businesses relying on the app.
As Apple is restricting more data flows protecting its users’ privacy, its newest update, iOS 14, is hurting more apps struggling to track users for their advertisements. The latest update on Apple’s iOS provides more control to users on what data the app can access, like Facebook.
One of the most affected apps that raises this concern is the social networking app Facebook. In an interview with a tech reporter, Facebook Chief Financial Officer David Wehner said that the company fears that the iOS 14 update will have a great impact on how they do their advertisements. Wehner said that the company’s bulk of revenue comes from its ads.
Wehner also reiterates the options where users can disable the tracker, which is a vital tool used by developers for where they can post targeted ads. When this is disabled, it will be hard for some developers on where to appropriately place their advertisements since they cannot determine their target space and audience.
Apple, however, said that when it comes to this feature, the developer must ask permission to allow and enable them to access data. App developers seek permission to track users across apps or websites which they didn’t own.
On their website apple.com, on the features of iOS 14, under Privacy, you can see the full details of how this restriction works on your mobile app:
“You can now get information on the App Store to help you understand the privacy practices of every app before you download it.”
Impact on other Businesses
Small businesses will suffer, Wehner added, as these businesses are relying more on advertising to promote their products and services to people. Facebook forecasted a revenue gain of 10% in the third quarter (Q3), but they are expecting a decline in the fourth quarter (Q4) once this update (iOS14) is launched.
It is quite unclear how Apple will identify those apps and whether they are collecting data from the users. And it seems that Apple will not change their mind on their stance.
Wehner warns that it will cut the lifeline for small businesses given that we are dealing with a global health crisis and that calls for recovery and growth might be cut due to these aggressive policies. You can find this data restriction in your Settings if you are running on iOS 14 beta.
Apple may be known for securing data from its users, but how will these updates change the way developers market their products and services?