iOS 14 will cause a 50% drop in Audience Network revenue, Facebook says

Facebook has previously stated that Apple’s upcoming iOS 14 software update could impact its advertising revenue. However, the company acknowledged in a statement on Wednesday how drastically it could affect the revenue of its Audience Network. Facebook said that iOS 14 could cause as much as a 50% drop in revenue for the Audience Network.

The Audience Network is a Facebook’s ad business that offers targeted advertising for mobile software developers that wish to include the company’s targeted ads in their applications. The Facebook Audience Network relies on targeting advertisements to users by tracking an iOS device’s unique ID number called the IDFA.

In iOS 14, Apple will make sharing the IDFA number to apps optional to users when the app is first launched. Facebook said that due to this opt-in feature, its apps will no longer use the IDFA number, stopping the opt-in prompt from even appearing.

The company says more than a billion people see at least one advertisement from its Audience Network every month. Though the Audience Network is one of Facebook’s revenue streams, it is unknown how much of Facebook’s ad revenue (which pretty much most of its total revenue) comes from its cut from the Audience Network. It is speculated that it’s not much, as Facebook doesn’t seem to be too worried about this privacy move.

It is also important to note that a majority of devices that see ads from the Audience Network are Android devices, which are unaffected by Apple’s privacy move.

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“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 its blog post.

Facebook also notes that it will be taking steps to comply with Apple’s new privacy rules in iOS 14. It is expected that iOS 14 will release to the public in late September. This will limit how advertisers and Facebook will be able to target ads to iOS devices running iOS 14.

“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.”

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Source: CNBC

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