Science Tech: Why Facebook Advertisers Are Afraid

Kurt Wagner, Bloomberg

When users on the iPhone were asked whether they would like to share their data, most of the answers were no. This is worrying for Facebook Inc.’s advertisers, who are losing access to some of their most valuable and planned data. They have already seen a decline in the effectiveness of their ads. Apple Inc. introduced iOS, the latest version of the iPhone’s operating system, in early June, which explicitly asks each app user if they’re willing to monitor their Internet activity. According to a branch that analyzes the growth of mobile apps, people are allowed to track their behavior only 25 percent of the time. This tracking has fueled the advertising industry for years. Mobile analyst Eric Seifert says this is very disastrous. I would say this to most advertisers. The big question is, are we seeing only short-term changes to where we can expect a return, or is this normal?

Facebook’s advertisers have seen its impact, especially in the last month. Those who run campaigns on Facebook on behalf of clients say that Facebook is no longer able to see how much sales are being generated by its ads. That’s why it’s hard to find out which Facebook ads are working. A Facebook spokesperson declined to provide details about what percentage of its users have accepted the tracking policy, but roughly 75 percent of iPhone users worldwide have downloaded the new operating system. Seifert estimates that Facebook’s revenue from this version of iOS will drop by as much as 7 percent if roughly 20 percent of users also accept tracking. If 10 percent of users allow Facebook tracking, revenue will drop to 13.6 percent.

A Facebook spokesperson said the changes to iOS will experience some ups and downs, but it shouldn’t have a significant impact in the long term. Advertisers say losing the ability to retarget customers after viewing products online is damaging. Apple bases privacy around the iPhone. The privacy changes on the iPhone apply to all app developers, not just Facebook. Despite so many challenges, advertisers don’t seem ready to leave Facebook just yet. Media buyers say their younger customers are already struggling a lot. So some people are questioning the privacy of Apple.


Source: Patrika : India's Leading Hindi News Portal by www.patrika.com.

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