Facebook Says Apple's New iPhone Update Will Disrupt Online Advertising
August 26 2020 - 12:48PM
Dow Jones News
By Jeff Horwitz
Facebook Inc. says privacy changes that Apple Inc. has made to
its newest operating system will cripple the social-media giant's
ability to serve targeted ads to iPhone users while they use
outside apps.
The announcement, which Facebook made Wednesday in a note to app
developers, will affect its Audience Network business, which
connects users' Facebook identities with their off-platform
activities.That enables the company to serve them ads on apps
outside of Facebook's.
The changes go into effect with Apple's new operating system for
iPhone, called iOS14, which was released in beta form to developers
this week.
The announcement is another shot in the increasingly contentious
relationship between the two tech giants, whose different business
models have led to public sparring. Apple, which produces devices
sold world-wide, has criticized the data-collection operation that
underlies Facebook's massive advertising business.
While Facebook doesn't disclose the size of the Audience Network
business, it is believed by analysts to be in the billions.
Facebook previously announced it had paid out $1.5 billion to
developers and publishers for the right to show ads on their
properties in 2018.
"Our ability to deliver targeted ads on iOS14 will be limited.
As a result, some iOS 14 users may not see any ads from Audience
Network, while others may still see ads from us, but they'll be
less relevant," the company wrote. Despite the company's efforts to
adapt, Facebook wrote, the changes "may render Audience Network so
ineffective on iOS14 that it may not make sense to offer it on
iOS14 in the future."
Facebook said the changes would likely result in reduced
earnings for developers "at an already difficult time for
businesses," adding that it considers the situation to still be
murky because of an absence of guidance from Apple.
Facebook said the iPhone changes are expected to "have a
far-reaching impact on the developer ecosystem."
Write to Jeff Horwitz at Jeff.Horwitz@wsj.com
(END) Dow Jones Newswires
August 26, 2020 12:33 ET (16:33 GMT)
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