Facebook Inc. will suffer damage to its core business when Apple Inc. implements new privacy changes, advertising industry experts say, as it becomes harder for the social-media company to gather user data and prove that ads on its platform work.
Facebook warned this week that Apple’s new feature, which is expected to roll out this quarter, will pose risks for its business, but the company hasn’t detailed how it is exposed. Facebook in August pointed to a small corner of its business that facilitates ad placements on third-party sites and apps. It has also played up how the change would hit small developers.
The core of Facebook’s business, its flagship app and Instagram, would be under pressure, too. The Apple change will require mobile apps to seek users’ permission before tracking their activity, restricting the flow of data Facebook gets from apps to help build profiles of its users. Those profiles allow Facebook’s advertisers to target their ads efficiently.
The change will also make it harder for advertisers to measure the return they get for the ads they run on Facebook—how many people see those ads on mobile phones and take actions such as installing an app, for example.
“The market dynamics here are going to shift heavily,” said Simon Poulton, vice president of digital intelligence at WPromote, a digital marketing agency. “If you are marketing on Facebook and the results are going down because the efficiency is going down, you are going to turn that down.”
