Facebook, Inc. (NASDAQ:FB) has warned developers that the upcoming iOS 14 privacy update will severely reduce its ability to track users’ activity on the internet and app ecosystem. The social media company says the upgrade will prevent it from showing targeted ads to other apps.
Apple’s upcoming iOS 14 update mainly aimed at more privacy options to users. Apple is expected to launch its iOS 14 before the end of the year. Facebook has projected that the upcoming upgrade will lead to more than 50% drop in Audience Network advertising business. Developers use the Facebook Audience Network to offer in-app targeted advertisements.
The iOS 14 will require developers to ask users permission to access unique device code, called an IDFA. Apple assigns a unique, randomly generated IDFA to each device. These codes are used by developers to tie together their activity.
Advertisers use the IDFA to launch targeted ads as well as to measure their effectiveness. Facebook has warned that its apps will not be able to collect IDFA information on iOS 14. According to Facebook, over 1 billion people see at least one Audience Network ad every month. The good news is that the majority of users are using Android phones and will be affected by the changes.
Nearly half of Facebook’s revenue comes from its advertising business. However, it is still unknown how much ads revenue Facebook draws from the Audience Network.
Apple is yet to announce the exact date when iOS will be launched. In a blog post, Facebook outlines steps it intends to take to ensure it remains in compliance with the new Apple rules. The new update is expected to reduce Facebook and advertiser’s ability to target ads on iPhones and iPads.
“We know this may severely impact publishers’ ability to monetize through Audience Network on iOS 14, and, despite our best efforts, may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS14 in the future,” Facebook said in a blog post.