CNBC spoke with several former Facebook employees to get details on why Facebook has been so heavily against the planned privacy updates that will come with the App Tracking Transparency changes that will come with the release of Apple’s iOS 14.5 update.
As of the release of iOS 14.5, Facebook and other app developers will be required to get express permission from users to access their advertising identifier, or IDFA, which is used to track usage across apps and websites for ad targeting purposes.
Facebook has spoken out against App Tracking Transparency, even going so far as to take out full-page ads that put Apple in the position of being anti-small business. Facebook CEO Mark Zuckerberg ranted against Apple’s aggressive consumer privacy protections, calling Apple’s efforts “competitive interference” with the social network.
Facebook has long said that Apple’s changes will hurt small businesses that use Facebook’s advertising tools. However, former Facebook employee Henry Love told CNBC that many businesses may not even notice a change.
“If you talked to any restaurant owner anywhere and asked them what IDFA is, I don’t think any of them would know what that is,” Love said. “It’s affecting Facebook at scale. Not the small business owners.”
Among the few “small business owners” who might feel the effects of the IDFA change are start-ups backed by venture capital money who have hired professionals with the skills to target users with sniper precision, Love said.
People who are targeting users across mobile, the web, and the Facebook Audience Network with the IDFA are “not small businesses,” said Love, calling such companies “sophisticated, VC-backed startups.”
While Facebook has been quite vocal about how harmful Apple’s changes will be, other social networks like Twitter and Snap have said the change will be good for user privacy and could even benefit their businesses.
The CNBC article explains how App Tracking Transparency could hurt Facebook:
Think of view-through conversions like this: You’re tapping through your Instagram stories and you see an ad for a pair of jeans. You don’t tap the bottom of the ad for more information because you’re busy checking out what your friends are up to, but the jeans were cute. A few days later, you go on Google, search for the jeans you saw on Instagram and buy them.
After the purchase is made, the retailer records the IDFA of the user who bought the jeans and shares it with Facebook, which can determine whether the IDFA matches with a user who saw an ad for the jeans. This shows the retailer that their Facebook ad worked.
Losing that type of measurement could be a big blow for Facebook. If advertisers are unable to accurately measure the effectiveness of their Facebook and Instagram ads, they may feel compelled to shift more of their budgets to other apps and services where they can see the exact return on investment for their ads.
Facebook has plans to ask users for permission to access the IDFA, and is currently testing what wording to use to indicate that allowing tracking will provide a better overall ad experience.