Facebook and Apple are feuding over ads, with the social media giant arguing that the recent iOS 14 updates will have a harmful impact on the part of many small businesses.
iOS 14 is the software that runs on the iPhone or iPad. For the recent update, what the users will probably notice first is the new redesigned home screen, but aside from the redesigned graphical features, it is the more interior update that is the source of the drama.
If you have been in the loop of this tech drama, you probably have encountered Facebook Business’ attempt in lambasting Apple’s new update which they argue that will affect advertisers and small businesses big time. Over the past few days, you may come across a website with a montage produced by Facebook of small business owners addressing their concerns over Apple’s stark terms which are essentially sabotaging their marketing efforts through video sharing. Aside from digital ads, Facebook has also been running print ads with the headline “We’re standing up to Apple for small businesses everywhere.”
The info campaign informs how Apple’s changes to its data tracking permissions in iOS14 that affect how apps can use ad-tracking tools with Apple’s ad identifier, the IDFA. While this change already has an impact on companies even as large as Facebook, imagine just how devastating these changes will be too small businesses trying to stay afloat in these trying times in addition to the challenges caused by the pandemic.
How does the new Apple software update really hit small to medium businesses?
With Apple using control of the App Store in a way that hurts the bottom line putting developers and small businesses on compromise. One of the reasons apps like Facebook and Instagram are free is because businesses see profitability in these platforms through their ad potential specifically on personalized and targeted ads which is based on what users have been searching online. With the recent software update, personalized ads would be limited.
Facebook marketing has been going well so far for these small businesses. But with the latest update, Facebook will be forced to adapt which may not be favorable for small business ventures that rely on personalized Facebook ads in growing their business.
Through the initiative of Facebook in informing the people about the impact of the iOS 14 software update via, many business owners submitted their videos voicing out their views:
“There is no possible way that our company could have reached the level of success that it has today without personalized ads.” – Monique Wilsondebriano of Charleston Gourmet Burger Company, Charleston, South Carolina
“We’re just trying to survive… These personalized ads on Facebook work really well and now it’s going to cost us more.” – Hrag Kalebjian of Henry’s House of Coffee, San Francisco, California
“It is limiting our ability to engage with people who wouldn’t normally see our advertising.” Joey Andenucio of Thriftu Gents
Source: Facebook Business
Here is an overview of what Apple is doing and Facebook’s stand over these changes:
- iOS 14’s AppTrackingTransparency
Facebook claims that this new policy is not about privacy but rather about profit. Meaning that it is possible that businesses will be forced to turn to in-app payments and subscriptions to gain revenue. While Apple can benefit greatly from this in terms of profit, free services will have to start charging and those that can’t afford to pay for targeted ads will be forced to shut down.
- This is not the time for this kind of update.
Unfortunately, with this pandemic that has no assurance of ending soon, SMEs are still in peril and are basically just trying to stay afloat. With some brick-and-mortar businesses shifting their business online to stay connected and keep their customers, personalized ads have become their way of reaching out effectively to their target market.
What makes the struggle is that they may not be able to use their advertising budgets efficiently. In one study, a survey was conducted to assess the impact of the COVID-19 pandemic on SMEs where it was reported that more than 35% of SME’s are using personalized ads to keep their business afloat during the pandemic. According to Facebook, without personalized ads, average small business advertisers will have to see a cut of over 60% in their sales since they will have to spend more on ads.
- Users get to decide whether to allow downloaded apps to track their online activities.
Apple is now giving the power to users to proactively decide whether or not to allow downloaded apps to track certain data from their online activities, such as what they’ve searched lately, websites they’ve visited, their previous purchases, and more.
Apps will be required to get permission from users to access their advertising identifier.
While this may promote more privacy, advertisers may find it hard to gather what could have been reliable info from their prospective consumers that can help them reach out, to get their interests, and take their goods across online platforms through ads.
These updates seem harmless enough — for the users. But for small businesses running personalized or targeted ads, this most likely has a huge impact on them and on Facebook advertising.
Lots of things may cause impact, and we certainly see it to fall more on those who thrive through ads which are the businesses. Apple may have seen it as a crucial move to improve privacy to its users but may also be unfair on other market players.
How many people in the audience use iOS devices?
How many will opt not to be tracked? How many would allow it?
How much info can advertisers possibly get if they are restricted to track what the consumers like?
Will we now spend a lot on ads for us to reach our target audience?
Audiences for conversions will now become less reliable since those who refuse the tracking are out of the sources. The updates will lead to less tracking of people on mobile devices and will also have an impact on mobile app ads. Audience Network publishers will take a hit on this, and the placement of ads may be rendered ineffective.
For now, we can only just predict how this Apple update is going to cost everyone but we can’t really be sure to what extent the impact is true. It can be just a simple adjustment to some business, but maybe a disaster for some. It may affect the entire industry, or it may be different for other businesses.