Apple iOS 14 Could Halve Audience Network Revenue

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Facebook acknowledged on Wednesday that Apple’s upcoming iOS 14 could result in more than a 50% drop in advertising activity on Audience Network.Facebook had previously warned that iOS 14 could have an impact on its advertising business, but the company’s blog on Wednesday noted how specific that impact could be. The Facebook Audience Network allows mobile software developers to deliver in-app advertisements targeting users based on Facebook data.

Today, advertisers can Use a unique device ID number called IDFA to better target ads and estimate their effectiveness. In iOS 14, every app that wants to use these credentials will ask users to turn on tracking when they launch the app for the first time. Facebook has said its apps will not collect IDFA information on iOS 14.

Facebook says more than a billion people see at least one Audience Network ad every month, although many of them likely use Android phones and will not be affected by the change. Facebook derives almost all of its revenue from advertising, but it’s unclear what percentage is attributable to Audience Network compared to ads on Facebook and other properties.

Apple hasn’t said when iOS 14 will launch, but it is expected to roll out this year.

The social network published a blog describing the steps to be taken to ensure that its advertising activity complies 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 can have a big impact on publishers’ ability to monetize through Audience Network on iOS 14 and, despite our best efforts, may make Audience Network so inefficient on iOS 14 that it may not make sense to deliver on iOS14 in the future, ”Facebook said in a blog post.

“While it’s difficult to quantify the impact on publishers and developers at this point with so many unknowns, in testing we saw a more than 50% drop in Audience Network publisher revenue when personalization has been removed from mobile ad installation campaigns, ”Facebook said. “In reality, the impact on Audience Network on iOS 14 may be much greater, so we are working on short and long term strategies to support publishers in these changes. ”

Facebook shares rose 5% midday Wednesday despite its announcement.

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