Last week, Apple release iOS 14.5, and with it a new feature that has sent messengers to online advertisers: for the first time, users can tell apps not to track their activity on different sites and services. To prevent this, Facebook and Instagram iOS apps warn users that tracking keeps these platforms “free”.
That is technically true; Facebook is an advertising company that earns money by displaying ads that its users click on. But the iOS 14.5 release marks the problem that Facebook can’t stop making money if it stops tracking, or worse, Apple’s App Tracking Transparency update could start charging social network users a fee. So it’s worth it to be completely clear: None of this is the case.
No measures against Apple’s follow-up will take a bite out of Facebook’s profits. The evidence is back; the platform has launched an ongoing campaign against these measures, including a series of full-page advertisements in major newspapers in December. (Facebook is not alone here; advertising companies and their accessories have condemned the daily grind, and a German marketing coalition he filed a complaint against the monopoly Against Apple.)
“There are some types of ads, mostly retargeting, that will be harder to display because now Facebook wouldn’t know who visited an app, put an item in the shopping cart, and so on,” says Ron Berman, a marketing professor at Wharton School at the University of Pennsylvania. He warned that Facebook will also find it more difficult to prove that product sales are linked to specific ads, due to the limitations of information and what information it may contain across sites and applications today.
But you don’t have to look much further than Facebook’s profit report last quarter posted last week that iOS 14.5 is unlikely to push the company into any abyss. Company he took revenues of more than $ 26 trillion in the first three months of 2021, and its net income nearly doubled to $ 9.5 trillion over the same period a year ago. He has $ 64 billion in cash and equivalents on hand. It’s very good. Even if every iOS 14.5 user stops tracking, Facebook will still have Android devices to make a profit.
Also, it’s not about preventing follow-up as if ads were completely gone. Arguably, it gives them less importance. People may not click on them so often, which is less valuable, and outside analysts have announced that Apple’s new policy will appear on the bottom lines of Facebook. “This year we’ve seen minimum estimates of 2 to 7 percent of Facebook ad revenue, and we find that range to be compelling, especially at the bottom,” says Nicole Perrin, chief analyst at eMarketer. However, he added, the company is expected to increase ad revenue despite App Tracking Transparency. As Gilad Edelman of WIRED has done indicate before, when third-party data disappears, companies with more primary data have an advantage. That’s it Google, and that’s Facebook.