Facebook warns publishers that Apple's upcoming privacy changes in iOS 14, which clamp down on ad tracking IDFA usage, will make Audience Network less effective

Facebook is warning advertisers that they can expect weaker ad performance from iPhone users once iOS 14 comes out next month …

Axios 2020-08-27 Sara Fischer

Context & Ripple Effects

This warning lands weeks after reporting that Apple Advertising appears to be on by default in iOS 14 while rival networks must ask users for permission to track — an asymmetry that frames why Facebook is flagging Audience Network damage now rather than waiting for launch.

The arc escalates from here: by December Facebook is running full-page newspaper ads attacking Apple and claiming the changes hurt small businesses, and by January experts are describing App Tracking Transparency as a threat to Facebook's core business across more than 85K iOS apps. This Axios piece is the earliest signal that the blast radius extends beyond Facebook's own feed to every publisher monetizing through Audience Network.

First-order effects

Publishers earning revenue through Facebook's Audience Network face weaker ad performance on iPhones once iOS 14 ships next month, because the IDFA restrictions degrade the targeting that prices their inventory.

Second-order effects

Advertisers and ad networks are forced to develop replacement targeting methods that don't depend on IDFA, as the broader industry braces for the change; Facebook simultaneously shifts to a public-pressure campaign against Apple.

Third-order effects

Control of the tracking identifier gives the OS owner structural pricing power: Apple's own ad product runs by default while competitors need opt-in consent, pushing mobile ad economics toward platforms that own the access layer — a shift that ultimately reaches Facebook's core data collection, not just its network business.

The trend: Mobile advertising is being restructured around OS-gatekeeper privacy defaults, concentrating advantage in first-party platform ad businesses at the expense of third-party tracking networks.

Discussion

@waltmossberg Walt Mossberg on x
In the forthcoming version of iOS, @Apple is simply switching from an obscure opt-out system for apps that want to track users across the web to an explicit opt-in system. At last! In my view, we should have a law requiring explicit opt-ins for the collection of personal data. ht…
@sarahfrier Sarah Frier on x
Facebook says apps using its advertising network could see revenue drop 50 percent, now that iOS 14 will require users to opt in to sharing their device info. https://www.bloomberg.com/...
@joannastern Joanna Stern on x
Aww, poor baby, Facebook. Now it has to ask permission to track everything you do on your phone. https://www.wsj.com/...
@rjonesy Ryan Jones on x
BREAKING: Facebook SDK will not adopt Apple's iOS 14 privacy prompt. Shocking (not at all). Just what Apple needed, another high-stakes game of chicken. https://twitter.com/...
@neilcybart Neil Cybart on x
RE: Facebook complaining about Apple's growing competitiveness. An expanding Facebook vs. Apple rivalry is not surprising. We are still in the early stages of what is to come. https://www.aboveavalon.com/ ... https://twitter.com/...
@jeffseibert Jeff Seibert on x
It should not be Apple's responsibility to enforce ethical practices industry-wise, but that's where we are, and I'm here for it. Your business model should not rely on tracking users across properties you don't own. Sorry. https://twitter.com/...
@hoofnagle Chris Hoofnagle on x
WSJ: “Facebook fears many users will reject tracking, if given the choice, affecting not only its business but also any app that uses its services to sell ads, from game-makers to news publishers...” https://www.wsj.com/...?
@shawndubravac Shawn DuBravac, PhD on x
This also shows how much the largest of tech companies can impact each other when those companies are on their turf. Facebook Says Apple's New iPhone Update Will Disrupt Online Advertising https://www.wsj.com/...
@hotdogsladies Merlin Mann on x
I hope Apple responds by releasing a free Safari extension that notices you're reading an article about Facebook and changes all instances of “ad” to “spyware.” https://www.engadget.com/...
@joannastern Joanna Stern on x
Let's also be clear, users had many of these controls in the past. Now Apple is just surfacing more of them to users.
@caseynewton Casey Newton on x
I wrote about this week's Facebook-Apple tussle over ads and why I have trouble taking Apple's claims at face value https://twitter.com/...
@sandofsky Ben Sandofsky on x
The collateral damage from iOS 14 privacy changes won't hold a candle to the companies Facebook has destroyed through pure malfeasance. https://twitter.com/...
@matt_cagle Matt Cagle on x
Facebook worrying its business will suffer if people can refuse to be tracked is everything you need to know about the business Facebook is in. https://arstechnica.com/...
@jason_rubin Jason Rubin on x
Unsaid is the damage this does to developers large and small. Many of the hypercasual games they make, truly free as they are supported solely by ads, become unviable. The consumers who liked those games and the business model lose out. https://www.bloomberg.com/...
@emilystewartm Emily Stewart on x
“Facebook is worth $800 billion. Apple is worth a staggering $2 trillion. Both companies are going to be fine no matter how this shakes out.” This is a great story and this sentence is going to bother me for the rest of the day. https://www.vox.com/...
@deardara Dara Moskowitz Grumdahl on x
A reminder that Facebook's revenue model is taking your content, or journalist's content, selling ads against it, and not paying you, or the journalists. You should get half of every ad sold against your content. https://www.cnbc.com/...
@shiraovide Shira Ovide on x
Really interesting. And I would like to mention for the zillionth time that Apple gets many billions of dollars a year in pure profit revenue from Google to enable its sophisticated ad tracking of iPhone users. https://twitter.com/...
@film_girl Christina Warren on x
If Facebook thinks it can benefit from the pro-developer/anti-Apple sentiment many have right now regarding App Store rules, I think it miscalculated. I'm even more excited about iOS 14 now that I know this kind of stuff won't be possible. https://www.wsj.com/...
@random_walker Arvind Narayanan on x
Finally the kind of disruption I can get behind. https://www.wsj.com/... The headline parrots the industry's usual rhetorical trick. Online advertising is just fine; it's the surveillance and targeting that are getting a few long-overdue guardrails.
@benedictevans Benedict Evans on x
People in ad-tech have been talking abut this for ages - slowly working its way out into the world. Between cookies and iOS privacy changes, Apple and Google are remaking half the online advertising stack. https://www.wsj.com/...
@aripap Ari Paparo on x
Facebook IDFA summary: -Estimated 50% drop in app revenue for FAN apps -FAN may be discontinued on iOS entirely -Advertisers need to create new accounts (why?) -FB SDK split into SSO vs Ads. https://www.facebook.com/...
@kylealden Kyle Pflug on x
The web has been going through a privacy reckoning for a while, but these problems are as insidious and more opaque in the world of native apps. That reckoning is overdue. https://twitter.com/...
@mattlynley Matthew Lynley on x
Well, of the two companies here that were at the antitrust hearing, one of these two aided the current administration's rise to power. I guess we'll see how that plays out. https://twitter.com/...
@sandofsky Ben Sandofsky on x
*Clutches Pearls* Won't someone think of the creepy business models! https://www.facebook.com/... https://twitter.com/...
@cityofthetown Tom Dotan on x
@samfbiddle This is no defense of FB, but framing the move as protecting the individual is probably doing too much of Apple's bidding. Especially given the boost this will give to Apple's own ads business.
@samfbiddle Sam Biddle on x
@cityofthetown I'm with you that nothing Apple does is selfless bc they're a company just like Facebook is, but I don't think forcing apps to request tracking permissions/breaking tracking is anything but a categorical benefit to iPhone owners even if Apple has some underlying se…
@sheeraf Sheera Frenkel on x
It's almost like every step Apple and other companies take to put more privacy options in the hands of users affects Facebook's ability to make billions off of people's private information? https://twitter.com/...
@samfbiddle Sam Biddle on x
I mean it's obviously true and we knew this was coming since iOS 14 was announced, but what do you think you're saying about your company when things that protect an individual harm your business so drastically that you need to issue a warning?
@samfbiddle Sam Biddle on x
posts like this, warning that pro-privacy features are effectively anti-Facebook features, really give up the whole game for Facebook. I'm sorta surprised they'd state this so publicly https://www.facebook.com/...
@benedictevans Benedict Evans on x
Apple and Google use control of the dominant browser and (in the USA) the dominant mobile platform to change what privacy looks like. The privacy regulator and the competition regulator should probably get in a room.
@thefienprint Daniel Fienberg on x
Poor Facebook. They should consider pivoting to video. https://twitter.com/...
@sarafischer Sara Fischer on x
🚨 If you use Apple data to target Facebook ads for app installs, read: — FB says ad partners should expect their ability to effectively monetize on Audience Network to decrease — Warns new 🍎changes “will disproportionately affect” FB's Audience Network https://www.axios.com/...
@pkafka Peter Kafka on x
Ah, reminds me. Here's a Google statement that didn't get into my story: “At the moment, we are still trying to understand how Apple's planned changes to iOS 14 will impact our partners and our users...” 1/2 https://twitter.com/...
@stevekopack Steve Kopack on x
Facebook says features in Apple iOS 14, which prevent and limit advertisers from tracking you, could hit its ad business revenue by **50%** https://www.cnbc.com/...
@pkafka Peter Kafka on x
That's good for people who care about privacy. That's bad for Facebook, and probably Google, and also for other people who rely on targeted advertising. Facebook thinks it can essentially sidestep Apple's move, though it's unclear what Apple will do in response.
@pkafka Peter Kafka on x
A lot going on here so I'll try to thread some of it for you. For the ad tech folks: Facebook is going to drop IDFA in iOS 14. For the rest of you: Apple is making it *much* harder to advertisers/publishers/ad tech ecosystem to hoover up information about you.
@sarafischer Sara Fischer on x
NEW: @Facebook is warning advertisers that they can expect weaker ad performance from iPhone users once @Apple's iOS 14 comes out next month. — It's telling them to create 1nd advertiser accounts to contain the disruption. — Full story on @axios: https://www.axios.com/...
@pkafka Peter Kafka on x
New: Apple is overhauling the way advertising works on its phones, which is a big problem for Facebook, among others. https://twitter.com/...

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