Facebook: No to tracking, advertisers not happy

Facebook: No to tracking, advertisers not happy

 

When users get asked on iPhone devices if they’d like to be tracked, the vast majority say no. That’s worrying Facebook Inc.’s advertisers, who are losing access to some of their most valuable targeting data and have already seen a decrease in the effectiveness of their ads.

 

The new prompt from Apple Inc., which arrived in an iOS software update to iPhones in early June, explicitly asks users of each app whether they are willing to be tracked across their internet activity. Most are saying no, according to Branch, which analyzes mobile app growth. People are giving apps permission to track their behaviour just 25% of the time, Branch found, severing a data pipeline that has powered the targeted advertising industry for years.

 

“It’s been pretty devastating for I would say the majority of advertisers,” said Eric Seufert, a mobile analyst who writes the Mobile Dev Memo trade blog. “The big question is: Are we seeing just short-term volatility where we can expect a move back to the mean, or is this a new normal?”

 

Facebook advertisers, in particular, have noticed an impact in the last month. Media buyers who run Facebook ad campaigns on behalf of clients said Facebook is no longer able to reliably see how many sales its clients are making, so it’s harder to figure out which Facebook ads are working. Losing this data also impacts Facebook’s ability to show a business’s products to potential new customers. It 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.

 

 

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A Facebook spokesman declined to share what percentage of its users have accepted the company’s tracking prompt, but roughly 75% of the world’s iPhone users have downloaded the newest operating system, according to Branch. Seufert estimated that in the first full quarter users see the prompt, the iOS changes could cut Facebook’s revenue by 7% if roughly 20% of users agree to be tracked. If just 10% of users grant Facebook tracking permission, revenue could be down as much as 13.6%, according to his models. The first full quarter with the prompt is the third quarter. Facebook reports second-quarter earnings at the end of July.

 

Most retail websites include Facebook software that sends detailed customer data back to the social network, including when a Facebook user makes a purchase. Facebook can then use that data to better understand what a retailer’s target customer looks like, and show that retailer’s ads to other people on Facebook who match that profile, known as a “lookalike” audience.

But as people have asked Facebook and other apps not to track their behaviour, the social networking company has started to lose access to this data. Gil David, a media buyer at Run DMG who spends about $1 million on Facebook ads per month for clients, said the company used to know about the vast majority of his client’s sales. Now that data is inconsistent. With one larger client, Facebook captured just 64% of sales. With a smaller client, just 42%.

About The Author

Osigweh Lilian Oluchi is a graduate of the University of Lagos where she obtained a B.A (Hons) in English, Masters in Public and International affairs (MPIA). Currently works with 1stnews as a Database Manager / Writer. [email protected]

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