Marketers Struggle as Facebook Users Decline to Be Tracked

According to Branch, which analyzes mobile app growth and tracks ad conversions, since Apple’s updated iOS asked users if they wanted to be tracked by apps, only 25 percent have agreed. That response has “been pretty devastating for … the majority of advertisers,” suggests mobile analyst Eric Seufert. Advertisers on social network Facebook have seen a particularly strong impact, according to media buyers who noted that not being able to reliably determine how many sales clients are making means it is challenging to figure out which ads are working.

Bloomberg reports that, “losing this data also impacts Facebook’s ability to show a business’s products to potential new customers … [and] also makes it more difficult to ‘re-target’ people with ads that show users items they have looked at online but may not have purchased.”

Branch added that about 75 percent of global iPhone users have downloaded the new operating system, and “Seufert estimated that in the first full quarter users see the prompt, the iOS changes could cut Facebook’s revenue by 7 percent if roughly 20 percent of users agree to be tracked … [and] if just 10 percent of users grant Facebook tracking permission, revenue could be down as much as 13.6 percent.”

Without tracking, Facebook can’t collect customers data, including when a user makes a purchase, hobbling its ability to target ads. Run DMG media buyer Gil David, “who spends about $1 million on Facebook ads per month for clients,” reported that the data is now “inconsistent,” capturing only 64 percent of sales with one large client and 42 percent with a smaller one.

Another media buyer noted that, before the iOS update, “Facebook used to capture around 95 percent of the sales data from his clients … [and that now] there is a 57 percent gap between sales he can see on Shopify and what Facebook is reporting.”

Without the more detailed information about consumers, Facebook can’t measure the impact of its ads “because media buyers don’t know how many sales are being driven by their marketing campaigns.” Without re-targeting, said advertisers, “it’s rarer for someone to make an impulse purchase on something pricey.”

Although Apple’s privacy changes “apply to all app developers on the iPhone, not just Facebook … the social network has been protesting the loudest, arguing for months that Apple’s new privacy features would hurt small businesses that rely on targeted advertising — and make up the bulk of the company’s sales.”

Disruptive Digital co-founder Maurice Rahmey said, “those bootstrapped advertisers or those advertisers that are trying to start from scratch to enter the market are going to have a much tougher time than a venture-backed company or somebody that’s more established.”

Facebook stated it is “working on new advertising features that require less data to measure an ad’s success” and exploring technology to “deliver personalized ads based on targeting data stored on the user’s device.” “Despite the challenges,” concludes Bloomberg, “advertisers don’t appear ready to abandon Facebook just yet. But media buyers said their smaller clients are already starting to struggle.”