How Apple's Changes to iOS Tracking Impacted Facebook's Ad Revenue

How Apple's Changes to iOS Tracking Impacted Facebook's Ad Revenue

In June 2020, Apple made significant changes to its mobile operating system that had a profound impact on how ads work on iOS apps. These changes made it much more challenging for app-makers and advertisers to track user behavior, ultimately resulting in a $10 billion revenue loss for Facebook this year.

The tracking system, which Apple altered, is the backbone of the internet's advertising infrastructure. It allows advertisers to follow users around the internet, ensuring that the ads they see are tailored to their interests. For example, if you look at shoes on Zappos, you may later see ads for those same shoes on other websites.

The effects of Apple's change were evident in Facebook's ad sales, but many assumed that the social media giant would find a way to adapt. After all, Facebook is a massive company with ample resources and talented engineers. However, the reality is that Facebook advertisers are now forced to spend more money in the hopes of reaching iPhone users. Additionally, they must make less-informed decisions about the effectiveness of their ad campaigns.

While Facebook can no longer provide advertisers with detailed information about individual user actions, such as link clicks or app downloads, it can still provide data on larger user groups. This limitation has prompted Facebook to explore new avenues for generating revenue, such as selling products directly through its own apps, including Instagram and Facebook Marketplace.

This shift towards creating digital storefronts on their platforms allows Facebook to interact directly with users, as well as advertisers, without interference from Apple or any other external entity. Mark Zuckerberg understands the importance of building a hardware and software platform that grants him control over user interactions.

Apple's changes were motivated by a desire to protect user privacy and limit data exploitation. Apple CEO Tim Cook emphasized the need for reform in a speech at an international privacy conference, stating that businesses built on misleading users and data exploitation do not deserve praise.

As businesses navigate these changes, it becomes crucial to conduct effective user interviews to gather insights and shape strategies. UX designer and mobile expert Stéphanie Walter provides a cheatsheet for conducting user interviews and follow-up questions.

To start, she recommends using open discovery questions that avoid a simple yes or no response, encouraging users to delve deeper into their thoughts and experiences. Understanding user tasks and activities is essential, as it provides valuable insight into how users interact with products or services. Additionally, asking users to perform or demonstrate tasks can offer further clarity.

Recalling the past and anticipating the future can be challenging for individuals, so it's important to approach these questions with caution. Opinions, viewpoints, attitudes, and projections offer valuable perspectives that can shape decision-making.

Discussing problems and pain points allows businesses to identify areas of improvement and potential solutions. Sentence completion and drawing exercises can provide additional insights into user preferences and thought processes.

During the interview process, it's essential to bounce back from questions, digging deeper into responses to uncover underlying motivations and needs. Asking for clarification, rephrasing, interpreting, and mirroring responses can help ensure a thorough understanding. Recalling past experiences can provide context and help users articulate their thoughts effectively.

One technique that should not be overlooked is the power of silence. Allowing a moment of silence after a question can encourage users to provide more thoughtful and genuine responses.

Finally, it's important to remember that the interview doesn't necessarily end when planned. There may be opportunities to gather further insights or address any missed points.

In conclusion, Apple's changes to iOS tracking have had a significant impact on Facebook's ad revenue. However, businesses can adapt by exploring new avenues for generating revenue and focusing on user interviews to gather valuable insights. By understanding user behaviors, needs, and pain points, businesses can make informed decisions and shape effective strategies.

Three actionable pieces of advice for businesses facing this challenge include:

1. Embrace new revenue opportunities: Explore alternative ways of generating revenue, such as creating digital storefronts or expanding into new markets.
2. Prioritize user interviews: Conduct thorough user interviews to gain valuable insights into user behaviors, needs, and pain points. This information will inform decision-making and help tailor strategies.
3. Adapt and evolve: Recognize that the landscape is constantly changing, and businesses must be agile. Stay up to date with industry trends and technology advancements to ensure continued success.