As Apple prepares to implement changes to the transparency of app tracking in iOS 14.5, CNBC spoke with several former Facebook employees to get details about why Facebook has been so strong against planned privacy updates.
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Starting this spring, Facebook and other app developers will need to obtain express permission to access a user’s ad identifier, or IDFA, which is used to track the use of apps and websites in order to target ads. Facebook has campaigned strongly against the transparency of the tracking application, publishing full-page ads in newspapers and trying to position Apple as an enemy of small businesses.
One of Facebook’s main arguments is that Apple’s changes will affect businesses that use Facebook’s advertising tools, but former Facebook employee Henry Love said CNBC that for many companies, the change may not even be visible.
Less ad tracking will prevent Facebook and its customers from targeting their ads as efficiently as they can now, but many companies may not need much data to target their ads effectively. For example, a small cafe in Texas uses broad targeting categories, such as zip code and ad age range, which are data that Facebook can collect from its own applications without the need for IDFA.
“If you talked to a restaurant owner anywhere and asked them what IDFA is, I don’t think any of them would know what that is,” Love said. “It affects Facebook on a large scale. Not small business owners.”
Among the few “small business owners” who could feel the effects of the IDFA change are venture capital-backed start-ups that have hired professionals with the skills to accurately target sniper users, Love said.
People targeting mobile, web and Facebook audience users with IDFA are not “small businesses”, with Love calling such companies “sophisticated VC-supported startups”.
Application tracking transparency will threaten to track conversions visible through Facebook, a value that allows advertisers to know how many people have seen an ad, not clicked on it, but subsequently made a purchase related to it. Retailers can record the information of the person who bought an item and then share it with Facebook, and Facebook can determine if that person’s IDFA matches a user who saw an ad for the purchased product.
CNBC says that losing this information could have a strong impact on Facebook, because if advertisers can’t accurately measure the effectiveness of ads on Instagram and Facebook, they may move more of their budget to other apps and services.
Facebook’s audience network, which offers ads in non-Facebook applications, will also be affected, as it uses IDFA data to choose the best ads to display to users based on Facebook data. If users opt out of IDFA sharing, efforts to personalize Facebook ads will become pointless outside of their own applications.
Facebook intends to ask users for permission to access IDFA and is testing wording that suggests that tracking will provide a better advertising experience. Facebook’s testing requests encourage customers to use IDFA to “support ad-based companies to reach customers.”