What’s Going on With Facebook and Apple’s New iOS 14 Update?

September 1, 20200
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Facebook Audience Network and The New iOS14 Update 

It’s no secret that Facebook is quite unhappy with the impending Apple operating system update known as iOS14, because it’s all but certain to result in less revenue for most of its advertising partners. This next version of the iPhone is expected to be made available sometime around mid-September, and as with any update, it offers a number of new features for its user base. One of these new features will provide phone users with the option of being tracked by apps like Facebook and its numerous advertising partners. It is almost inconceivable that users will actually choose to be tracked by Facebook and/or partners, so that means targeted advertising may quickly fall by the wayside.

Apple assigns a unique code called an ID For Advertisers (IDFA) which can be collected by Facebook and other apps so as to track user behavior on the Internet. This allows Facebook to track which websites you’re visiting, which other apps you might be using, the amount of time you spend reading various Internet content, and what kinds of products you’re clicking on. Having this information in hand, it can then be used by Facebook and its partners to deliver targeted ads to users when they’re in the process of using other apps or surfing the web in general when using Facebook’s Audience Network program.

If phone users opt to not be tracked by making this IDFA code available, it will no longer be possible to obtain this kind of information and those kinds of targeted ads cannot be served. Facebook has already warned its advertising partners of this impending update, and it has advised them that they could face losses of 50% or more in advertising revenue from users of Apple iPhones. Needless to say, Facebook is more than a little upset about this new privacy option available in the iOS14 update.

What is Audience Network? 

Facebook makes a whopping 80% of its total income from advertising, which amounted in the most recent quarter to nearly $6 billion, and this advertising was inserted into practically every kind of Facebook content on the platform. However, the ads which contribute to that staggering total revenue income don’t just appear on the Facebook platform itself – it actually feeds many other apps and websites with additional advertising from what it calls the Facebook Audience Network.

Facebook allows its advertising partners to extend their ad campaigns off the platform in the same way that they conduct campaigns on Facebook itself, by using the same targeted data they acquire from users. This is a huge boon to advertisers, because it means they get more bang for their buck, and can save money on advertising costs. For users, it means that the same kinds of ads you see on the Facebook platform will follow you wherever you happen to go on the Internet.

Even while Facebook’s user growth begins to slow down, it can expect to increase earnings from advertising substantially because of the vast potential for advertising on the zillions of apps and websites where targeted advertising can be employed. That makes Audience Network a key element of Facebook’s future, since it will help sustain the platform by constantly bringing in revenue from these targeted ads. Even though Audience Network was only launched in 2014, it has quickly risen to become a legitimate threat to the dominance of Google’s Display Network, and is currently the second largest mobile-ad network in existence. 

Facebook ads on your timeline vs. Audience Network

The ads which appear on your timeline vs. those which are administered by Audience Network can be exactly the same ads, and can indeed be part of the exact same campaigns. The big difference between the two types of advertising is that timeline ads occur while you are actually on the Facebook platform, and the ones managed by Audience Network can cause them to appear on any website you visit, or any app which you use – all outside the framework of the Facebook platform. Because this advertising all occurs outside the Facebook platform, it is here that the biggest impact will be felt because of the iOS14 update.

The ads that you see in your Facebook Timeline, Instagram, are not Audience Network. But the ads you create can be placed within the Audience Network.

When Audience Network was being developed, it was decided to go all-mobile with it because mobile advertising had just surpassed the level of desktop advertising in volume, and it was clear that was where the future would be. It was also decided to make extensive use of Facebook’s targeted data, and to go all-native, which meant that ads would be made to blend in with existing organic content. At present, 80% of these ads are native ads, and these kinds of ads typically produce between 20% and 40% more revenue than banner-type ads do. It has allowed apps to sell fewer ads, but to make more money off each one they do sell, because the ads are highly targeted and much more effective.

Going forward

Facebook has released an announcement informing its advertising partners of the likely impact that the iOS14 update will have on advertising. In that announcement, it advised partners that a 50% reduction in advertising revenue would be possible, and that the total impact could even be well beyond that. In the announcement, Facebook also declared its intention to continue to support developers and publishers to the greatest extent possible, given the new Apple environment.

Facebook has promised to release an updated version of its Audience Network Software Developer’s Kit, since there are nearly 20,000 such developers and publishers around the globe who make their livelihood from developing integrations with Audience Network and its advertising potential. Supposedly, the updated Software Developer’s Kit will help with support for iOS14, although it’s unclear how Facebook could have any recourse if users simply opt to retain their privacy, and turn off the IDFA code which makes targeted advertising possible.

The iOS14 update notwithstanding, Facebook’s Audience Network team is committed to expanding the product’s usage, and to offer even more platforms and ad formats to advertisers. While this is expected to be a gradual process, Facebook is preparing itself for an eventual showdown with Google over mobile advertising, so it is cautiously putting its ducks in a row before expansion. In order to enjoy continued success and continued growth, it will have to devise an effective strategy to combat the potential for mobile devices which choose to offer greater privacy to their users.

What Can You Do?

Diversifying your online marketing can help insure that your advertising plan won’t be as affected by the new iOS 14 update. Facebook is a great marketing platform, but you need to be sure your business has other marketing channels.

All in all, this update does not mean the end for Facebook as a marketing platform. It just means that your content needs to be as powerful as ever. The audience network isn’t the only place where your customers are. The main Facebook Timeline, and Instagram are still just as important as ever for your Facebook Ads to live.

For more help in marketing, look at Google Search Engine Optimization and PPC Display Ads for a cost effective advertising campaign with an immediate return. Contact us to get started with a diverse marketing strategy.

 

Update September 3, 2020:

Apple announced they are pushing back the date to require applications like Facebook for tracking data between applications to early 2021.

Apple: “To give developers time to make necessary changes, apps will be required to obtain permission to track users starting early next year. More information, including an update to the App Store Review Guidelines, will follow this fall.”

Read more here: https://developer.apple.com/news/?id=hx9s63c5&1599152522

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