Apple's new privacy policy is a nightmare for Facebook

Apple has toughened its privacy policy with iOS 14, with plans to introduce multiple new features that let users control how third-party apps use their data. Apple’s new feature, “App Tracking Transparency,” will be released to all users this year. Once it goes live, apps could no longer track users between other apps and websites without their permission – an alarming situation for Facebook, since the social network relies heavily on advertisements for its revenue.

Facebook has criticized these changes while also running ad campaigns explaining how small businesses will suffer. Now, Facebook’s ex-employees have come forward to explain why the social media giant is worried about the changes.

CNBC interviewed former Facebook employees who detailed how Facebook will be affected by Apple’s new privacy policies. Like other platforms that sell advertisements, Facebook uses “view-through conversions” to measure how many users saw an ad and didn’t immediately interact with it but later made a related purchase.

After a purchase is made, the retailer records the Identifier for Advertisers (IDFA) of the user who bought the product and shared it with Facebook, determining whether the IDFA matches with a user who saw an ad for the jeans. This shows the retailer that their Facebook ad worked”, the CNBC report said.

It gives Facebook and the advertisers a lot of information about the user who interacted with the ad, which also helps them determine which users a specific ad will be shown.

With App Tracking Transparency in iOS 14, users will be able to opt-out of letting Facebook record the IDFA, which would make it difficult to measure whether the ad was successful in its purpose. This could result in fewer advertisers using Facebook apps to promote their products and services, which will definitely make the company lose money.

The company also fears losing advertisers to Google, which currently has the largest online advertising platform with Google Ads.

Facebook is the number-two recipient of online ad dollars, behind Google. One particular threat is that advertisers will pour more money into Google’s search ad business, which Facebook cannot duplicate, and which targets users at the time of conversion,” the CNBC report added.

It doesn’t seem likely that Facebook will not comply with Apple’s rules, but the company will have a hard time trying to convince its users to enable the tracking option with iOS 14.5 — which is expected to be released later this month.

Source: CNBC