Facebook says Apple’s advertising changes are hurting its business

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Facebook said on Wednesday that changes to Apple’s new privacy terms will continue to hurt its advertising business in the third quarter.

Why is this important: Facebook doesn’t typically provide these types of updates outside of revenue calls. The update signals investors that the company sees numbers in the current quarter that reinforce previous warnings about the impact of Apple’s changes.

  • In a blog post, Facebook vice president of product marketing Graham Mudd wrote: “As we noted during our call for results in July, we expected the platform changes to be. form, especially the recent iOS updates, have a greater impact in the third quarter compared to the second quarter. “

The big picture: The admission is likely to intensify an ongoing feud between Facebook and Apple.

  • Facebook has been saying for months that Apple’s tracking changes aren’t about privacy, but rather a move to assert dominance.
  • Apple says the changes are aimed at improving the consumer experience.

Details: Facebook also revealed that it inadvertently underreported web conversions, such as a sale or app install, leading advertisers to believe their ads were not as effective.

  • The tech giant said that due to the underreporting, their performance measurement was on average 15% worse than it would have been.
  • Referring to the company’s advertisers, Mudd wrote, “Many of you have told us that the impact on your advertising investment has been greater than expected. The cost of achieving your business results may have increased and it has also become more difficult to measure your campaigns on our platform. In some cases, this is due to underreporting on our part. “
  • “In some cases, this is due to underreporting on our part. Our estimate is that in total, we underestimate iOS web conversions by around 15%; however, there is a wide range for individual advertisers. We believe real-world conversions like sales and app installs are higher than reported for many advertisers. We are committed to helping you better measure these results and improve your performance.

Go back: Facebook said in its second earnings call that it expected Apple’s changes to have a bigger impact on its third-quarter revenue than it did on the second.

  • Apple has delayed the rollout of its new application tracking transparency feature, which is why its impact is now being felt.
  • The adoption of Apple’s latest software update, iOS 14.5, mostly ended in June.

Between the lines: A Facebook source said advertisers wanted more clarity from the tech giant on how to handle ad targeting changes caused by Apple’s new privacy terms.

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