Facebook is testing a notification for Facebook and Instagram iOS app users globally that encourages opting in to tracking for a “better ads experience”
Facebook had already warned that Apple’s iOS 14 limits on IDFA use would make Audience Network less effective. The new Facebook and Instagram prompt is the company’s direct attempt to preserve permission-based tracking before those limits reshape ad measurement.
The later shift from a “better ads experience” message to notices framing tracking as helping keep services free of charge shows Facebook testing how to explain the same consent request to iOS users.
First-order effects
Facebook and Instagram iOS users are asked to explicitly permit tracking, making their individual choices immediately relevant to Facebook’s ability to target and measure ads on those apps.
Facebook’s ad business must rely more heavily on users who grant permission, while its Audience Network warning signals exposure for publisher inventory that depends on the same tracking capability.
Second-order effects
Advertisers using Facebook’s tools face weaker campaign tracking and customer targeting when opt-in rates are low, an impact later reported across Facebook’s advertiser base in the post-update opt-in shortfall.
Publishers using Audience Network have greater incentive to assess whether its reduced effectiveness changes the value of their ad inventory relative to other monetization options.
Third-order effects
Mobile advertising is moving from default device-level identifiers toward consent-dependent measurement, shifting leverage toward platforms that can persuade users to opt in and still deliver useful ad performance when they do not.
If low opt-in behavior persists, ad platforms and their customers will compete more on first-party audience relationships and measurement resilience than on unrestricted cross-app tracking.
The trend: Apple’s privacy changes are forcing ad-supported platforms to turn tracking consent into a product and revenue-critical user interaction.
Here's what Facebook will show app users in a test to try to get people to opt-in to sharing IDFA following Apple's changes. These will appear immediately before the Apple prompt: https://www.cnbc.com/... https://twitter.com/...
5/ $AAPL's cash cow as we all know is iPhone - and everything Apple does is to protect and extend the iPhone moat; even their services businesses and their wearables business are essentially extensions of iPhone.
12/ On IDFA specifically, $AAPL's view of what internet/advertising should be is comical + straight out of the 1980's. If you believe in an open & free internet, you cannot also believe in Apple's vision. Tim Cook says there's a price users pay when they are not the customer...
7/ Compounding $AAPL's sensitivity is that Apple has never been that great at services, the very thing that ties the ecosystem together. Think iMessage, Maps, etc. If anything, $GOOG + $FB are in MUCH stronger positions there & the gap is prob widening, despite Apple's efforts.
4/ $FB will need to own that next platform in order to more fully protect their current business, network, and cash cow, as well as expand in other areas like payments, etc.
10/ In this case, $FB is playing offense, $AAPL + even $GOOG are playing defense. IMO, the straw that breaks the camels back is when $GOOG decides to stop paying $AAPL $12B a year to be the default search on iOS. It will happen eventually, by force (anti-trust) or by choice.
Facebook spokesperson: “Apple's new prompt is designed to present a false tradeoff between personalized ads and privacy; when in fact, we can provide both.” Riiiiight. https://www.theverge.com/...
9/ While Tim Cook & $AAPL are positioning themselves as champions of user privacy, really this has nothing to do with privacy at all. If you really think Apple is all about privacy, why is it accepting $12B a year from $GOOG, a company with the same issues as $FB? Money talks.
13/ But guess what? Users will pay a MUCH higher price living in the world that $AAPL envisions. I don't know the future, and I totally understand that a lot of people will disagree with everything I just said, so keep in mind that this is all just one man's opinion.
6/ $AAPL too knows that AR/VR could be the next major computing platform, and that $FB/Oculus is a major competitor w/ a multi-year head start in building out that ecosystem of developers and users. No bueno for Apple.
11/ This will essentially be a $12B x 30 = $360B market cap transfer from $AAPL to $GOOG and a major shift in fortunes given this a -$12B of FCF for $AAPL and a +$12B of FCF for $GOOG, and it would also signal a major shift of strategy from defense to offense for Google.
8/ So while $FB is trying to attack $AAPL by building out great services and the next computing platform, $AAPL is attacking by going after $FB's current cash cow: advertising.
3/ Although $FB is a great business, it has always been in a somewhat precarious position in that it is reliant on the major platforms: iOS + Android. Zuck has been well aware of that risk; and Oculus is a bet that every 15 years a new computing platform comes about and ...
@verge All the change in iOS is doing is asking for user CONSENT to track you outside of the actual app itself. And Facebook is throwing a tantrum because they don't think you should have a choice in that as a user. It's disgusting behaviour. #DeleteFacebook
Facebook doesn't want you to own your data choices. It wants your data for themselves so they can profit off of it. If you don't pay for a product then you are the product. https://twitter.com/...
It really is f'd up picturing Tim Cook setting next to a roaring fire in his mansion sipping the tears of small business owners from a brandy snifter. https://twitter.com/...
Anyway, it'll be interesting to see how many people opt into Facebook tracking them because Facebook says it means better ads and helps small businesses. https://www.cnbc.com/...