Facebook on Wednesday acknowledged that Apple’s upcoming iOS 14 could lead to a more than 50% drop in its Audience Network advertising business.
Facebook had previously warned that iOS 14 could impact its advertising business, but the company’s blog post Wednesday outlined just how specific that impact could be. The Facebook Audience Network allows mobile software developers to provide in-app advertisements targeted to users based on Facebook’s data.
Today, advertisers can use a unique device ID number called the IDFA to better target ads and estimate their effectiveness. In iOS 14, each app that wants to use these identifiers will ask users to opt in to tracking when the app is first launched. Facebook said its apps will not collect IDFA information on iOS 14.
Facebook says more than 1 billion people see at least one Audience Network ad every month, although many of those are probably using Android phones and will not be affected by the change. Facebook derives nearly all of its revenue from advertising, but it’s not known what percentage is attributable to the Audience Network versus ads on Facebook and other properties.
Apple has not said when iOS 14 will launch, but it’s expected to roll out this year.
The social network published a blog outlining steps it will take to ensure its advertising business is in compliance with Apple’s requirements. These steps will limit how effectively Facebook and its advertisers can target ads to iPhone and iPad users.
“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.
“While it’s difficult to quantify the impact to publishers and developers at this point with so many unknowns, in testing we’ve seen more than a 50% drop in Audience Network publisher revenue when personalization was removed from mobile ad install campaigns,” Facebook said. “In reality, the impact to Audience Network on iOS 14 may be much more, so we are working on short-and long-term strategies to support publishers through these changes.”
Facebook shares closed up more than 8% Wednesday despite its announcement.