Facebook, as the headliner of the first “victims” of this measure, fears for its dealers who use its advertising service. The ads the company is serving will be less relevant and less effective in reaching the right people, said the group, which also owns Instagram.
Mark Zuckerberg, CEO of Facebook, rated it as “anti-competitive” behavior in a January speech. Of course, it is also and above all a question of its own earnings, while the group relies heavily on advertising for its sales ($ 29 billion in net income in 2020).
For now, Facebook has been content to confirm that it will comply with the iOS 14.5 deployment (which makes the new surveillance transparency policy mandatory). But he also said that he will add several comments on the insert he sends to his users so that they give their permission or not to provide their personal information.
On other platforms, as for the company behind the Snapchat application, the same observation, but with a different approach. In early April, our colleagues at iPhon told us that the company was already working on an alternative that would almost completely wipe out the change in income policy.
Apple has another surprise in store for Facebook
Until then, Apple’s update was feared for this reason. The fleet has more than a billion smartphones around the world, and iOS users are much more lucrative to advertisers than Android users. But a second bad news will invite itself to the party: Apple intends to strengthen its own presence in advertising.
As the Financial Times stated last week, iOS 14.5 appears to be the update that Apple plans to change the App Store interface. The novelty: a new advertising insert for applications. According to the first beta graphic, these sponsored ads are shown as “suggested” apps on iPhone screens even before entering a search.
Apple sends a strong message. In addition to deciding on the guidelines for integrating advertising into its ecosystem, it is now important to use its stance to invite yourself as an excellent competitor for Facebook and Google.
If the brand decides to strengthen itself in advertising, the shares of its competitors are all the more affected. And these estimates are already quantified. According to the Financial Times, Apple expects to generate $ 1 billion in additional revenue from these new sponsored displays.
The plan isn’t surprising considering that Apple has been trying to grow its service business since 2019. Currently, a third of the revenue on this point comes from the 15-30% commission that Apple pays for in-app purchases (which led to a conflict with Epic Games over Fortnite).
Initially, these changes in advertising policy in the Apple environment will certainly be very well received by users, in a contemporary context in which the disclosure and resale of personal data to third parties are very poorly perceived.
Giants like Facebook and Google are sure to label this behavior anti-competitive in an effort to contain the brand and attract the attention of regulators who are already concerned about the brand’s antitrust practices.