It is true that small businesses generally depend on advertising. In recent years, due to the overwhelming popularity of social media and Facebook’s monopoly in that space, this means that many small businesses depend on Facebook. But it doesn’t have to be this way – small businesses would still find other places to advertise in targeted ways, even if Facebook didn’t exist, let alone if its targeting and tracking features were completely impaired. Consider Facebook’s ad statistics. What does it mean that 44 percent of small businesses increased advertising during the pandemic? However, during the pandemic, more people are stuck at home, and Facebook’s monopolistic advertising network sees higher consumption. Many businesses advertise because more consumers are on the couch looking at their phones. This figure does not necessarily indicate that small businesses benefit from advertising on Facebook, only that they have no other option.
The company also notes that without targeting, sales for small businesses would fall by 60% for every dollar spent on ads on Facebook. But this is a potentially misleading figure that does not refer to the possibility for these companies to identify alternative places to reach consumers. We already know that without targeted optimization, Facebook advertising would be much less effective. Remember that in the Facebook advertising network, ad placement is priced by auction, which means that with less targeting efficiency, the price of Facebook advertising would fall accordingly – which in turn would open up more marketing budget for small businesses to advertise elsewhere. The outcome? Apple’s policy will take a bite out of supervisory capitalism and hand over-profits to traditional media and advertising companies that will give small businesses a greater variety of opportunities to promote their products and services. A more significant number that Facebook will report would be how ad targeting options correlate, if at all, with the overall business success of small businesses – not with their sales rates on Facebook. Facebook can research and eventually report on the former, but is well aware that such a study would not produce a useful number for their purposes.
Of course, in the short term, these changes will cause some minor headaches in updating ad campaigns and code. But people will still want to buy local produce, patronize mom and pop stores, and donate to charities in their neighborhood. In the meantime, Facebook will inevitably adjust its ad targeting technologies and develop new ways to track users in aggregate and anonymized ways within its applications – innovations that will help the advertising industry stay profitable while meeting new compliance constraints. go Apple.
And aren’t these changes that the public should want, anyway? At the end of the day, small business owners are also individual citizens and consumers. They care about privacy, as anyone should – and any increase in data privacy, marginal or not, is an economic gain for consumers. Local and digital small businesses will be able to compete fairly – and now their owners will have a little more privacy protection. There are trade-offs inherent in any policy change; it can be argued that even if advertisers do experience minor success in directing advertising in the near future, however it is good for the whole society, given the gains in individual privacy and autonomy that will result as well.
So what is Facebook talking about in its full-page ads? It is not surprising that the success of his own business – and his business model. Ad targeting and engagement tracking practices are exactly what makes Facebook so powerful in the digital ecosystem. We know that the extremely dominant share – over 98% – of Facebook’s global revenue, which in 2019 was over $ 70 billion, comes from advertising. Even a 5 percent result equates to a loss of billions of dollars a year, a reduction that Facebook’s financial community – including capitalists, shareholders and directors and company staff – does not want to see.