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[Eric] Seufert [a mobile analyst who writes the Mobile Dev Memo trade blog] estimated that in the first full quarter users see the prompt, the iOS changes could

[Eric] Seufert [a mobile analyst who writes the Mobile Dev Memo trade blog] estimated that in the first full quarter users see the prompt, the iOS changes could cut Facebook’s revenue by 7% if roughly 20% of users agree to be tracked. If just 10% of users grant Facebook tracking permission, revenue could be down as much as 13.6%, according to his models. If those figures are even near the ballpark, this would surely represent a significant blow to FB. If widely circulated, this could be wielded to some effect in a campaign by FB detractors/rivals.

cfjgvjh 5y ago
> If widely circulated, this could be wielded to some effect in a campaign by FB detractors/rivals. But who are the FB ads rivals that aren't affected in a similar manner by this change? Since the tracking permission isn't specific to FB, wouldn't other players with a similar business model also be negatively impacted?
- fairity 5y ago
  > But who are the FB ads rivals that aren't affected in a similar manner by this change? Google. Apple's privacy changes restrict tracking from within mobile apps like Facebook and Instagram. Google is primarily browser-based and remains largely unaffected.
  - jensensbutton 5y ago
    No they don't. They only prevent tracking _across_ apps. Facebook will track everything you do and show you just as many ads in their properties as they did before. This really does harm smaller companies more than Facebook.
- klodolph 5y ago
  I think this will affect different advertising platforms differently depending on how much they rely on targeting to begin with. Facebook's ad platform has some crazy tools for targeting to begin with--it's a big part of the platform's value in the first place. Less so for most competitors.
- samizdis 5y ago
  I should have been clearer, sorry. I wasn't considering those competing against FB for ads in the same medium. I was thinking more of rivals for ad spend generally. Perhaps some of it would revert to print titles, or broadcast, as a result. I'd like to think that sometimes an advert can be effective even if you can't measure its impact precisely. Perhaps I am unduly influenced by the sorts of ads that I like, which tend to be posters, billboards or, just occasionally, TV/cinema/online pre-rolls. My favourite example would be the success of a Levi's ad from the '80s, see [1]: ‘It was a piece of magic’: How Levi’s ‘Laundrette’ ad led to an 800% sales boost Yes, I realise that no small company can afford such advertising as that, but in a previous life, when I spent about a year in advertising sales for a local newspaper, I was wined and dined about a dozen times by local firms who'd let me come up with ad copy for them, and sometimes a campaign, who (rightly or wrongly) attributed a sales boost to my efforts. Anyhow, you make a good point nonetheless. [1] https://www.marketingweek.com/levis-laundrette-sales-boost/ https://www.marketingweek.com/levis-laundrette-sales-boost/
  - stormbrew 5y ago
    I mean it doesn't have to move to dead venues like print or tv broadcast in order to just get away from targeting. It's not like internet advertising requires narrow demographic and individual history targeting for some reason, it's just that it made that more convenient. > Yes, I realise that no small company can afford such advertising as that, but in a previous life, when I spent about a year in advertising sales for a local newspaper, I was wined and dined about a dozen times by local firms who'd let me come up with ad copy for them, and sometimes a campaign, who (rightly or wrongly) attributed a sales boost to my efforts. I mean, the fact that this isn't really a thing anymore is almost certainly part of what kills local media nowadays, and by a kind of vicious cycle also helps kill local businesses. It used to be that small, local businesses weren't competing on the same playing field as large (inter)national businesses. They'd get local eyes on local ads in local venues. That would keep local media alive, and the ads would keep local businesses competitive. Now they fight with national brands for ad space on national platforms where they're outspent for more narrowly targeted ads than were ever possible in the old days. Local media dies to national media, local businesses die to national businesses, meanwhile the national media gets bigger and richer every day.
pradn 5y ago
7% is about a quarter or two of growth, but not a fundamental blow. The upper end of 13.6% is much more painful, but probably still only like a year of growth. Will this make Facebook change its business model and incentives completely - I don't think so. We'll still have to deal with design for engagement and data harvesting/storage/analysis at a grand scale.
whynotminot 5y ago
I wonder if more money will go to “influencers” whose reach can be somewhat more easily well understood. Can’t wait to see more paid placement in content, getting around my paid subscriptions, ad blockers, and “do not track” requests.
tfehring 5y ago
Here's his model: https://docs.google.com/spreadsheets/d/14UkIkzBCfcQzYZagC5qo0lkI-TuaLYlfit2Sz3MfPC4 https://docs.google.com/spreadsheets/d/14UkIkzBCfcQzYZagC5qo... It looks like the 7% and 13.6% figures the article quotes are the initial revenue decreases for a single quarter, which the model assumes would recover thereafter. In general, the model is based on some very, um, stylized assumptions. I'm really skeptical that a 12.5% increase in the number of users who block tracking (from 80% to 90%) would result in a 60% increase in the impact of that blocking on revenue. That said, I don't think the numbers are drastically out of line. Apparently >60% of Facebook's revenue is from iOS, so it wouldn't take that large of a decrease in efficiency for the revenue hit to end up in the 10% ballpark. The main question to me is the extent to which the loss is borne by Facebook or by advertisers. It's possible that advertisers are effectively price-takers and will keep paying basically the same amount despite a decrease in efficiency.
bookofsand 5y ago
According to a sibling comment, ">60% of Facebook's revenue is from iOS". Our society is selling out on privacy and subjecting itself to mass 24/7 surveillance for a paltry 22.5% of Facebook / adtech revenue. In other words, we could outlaw user tracking tomorrow, and Facebook / adtech would continue just fine, with only a moderate haircut. Are we that desperate to milk the last possible $ right now?!

cfjgvjh 5y ago

> If widely circulated, this could be wielded to some effect in a campaign by FB detractors/rivals. But who are the FB ads rivals that aren't affected in a similar manner by this change? Since the tracking permission isn't specific to FB, wouldn't other players with a similar business model also be negatively impacted?

fairity 5y ago
> But who are the FB ads rivals that aren't affected in a similar manner by this change? Google. Apple's privacy changes restrict tracking from within mobile apps like Facebook and Instagram. Google is primarily browser-based and remains largely unaffected.
- jensensbutton 5y ago
  No they don't. They only prevent tracking _across_ apps. Facebook will track everything you do and show you just as many ads in their properties as they did before. This really does harm smaller companies more than Facebook.
klodolph 5y ago
I think this will affect different advertising platforms differently depending on how much they rely on targeting to begin with. Facebook's ad platform has some crazy tools for targeting to begin with--it's a big part of the platform's value in the first place. Less so for most competitors.
samizdis 5y ago
I should have been clearer, sorry. I wasn't considering those competing against FB for ads in the same medium. I was thinking more of rivals for ad spend generally. Perhaps some of it would revert to print titles, or broadcast, as a result. I'd like to think that sometimes an advert can be effective even if you can't measure its impact precisely. Perhaps I am unduly influenced by the sorts of ads that I like, which tend to be posters, billboards or, just occasionally, TV/cinema/online pre-rolls. My favourite example would be the success of a Levi's ad from the '80s, see [1]: ‘It was a piece of magic’: How Levi’s ‘Laundrette’ ad led to an 800% sales boost Yes, I realise that no small company can afford such advertising as that, but in a previous life, when I spent about a year in advertising sales for a local newspaper, I was wined and dined about a dozen times by local firms who'd let me come up with ad copy for them, and sometimes a campaign, who (rightly or wrongly) attributed a sales boost to my efforts. Anyhow, you make a good point nonetheless. [1] https://www.marketingweek.com/levis-laundrette-sales-boost/ https://www.marketingweek.com/levis-laundrette-sales-boost/
- stormbrew 5y ago
  I mean it doesn't have to move to dead venues like print or tv broadcast in order to just get away from targeting. It's not like internet advertising requires narrow demographic and individual history targeting for some reason, it's just that it made that more convenient. > Yes, I realise that no small company can afford such advertising as that, but in a previous life, when I spent about a year in advertising sales for a local newspaper, I was wined and dined about a dozen times by local firms who'd let me come up with ad copy for them, and sometimes a campaign, who (rightly or wrongly) attributed a sales boost to my efforts. I mean, the fact that this isn't really a thing anymore is almost certainly part of what kills local media nowadays, and by a kind of vicious cycle also helps kill local businesses. It used to be that small, local businesses weren't competing on the same playing field as large (inter)national businesses. They'd get local eyes on local ads in local venues. That would keep local media alive, and the ads would keep local businesses competitive. Now they fight with national brands for ad space on national platforms where they're outspent for more narrowly targeted ads than were ever possible in the old days. Local media dies to national media, local businesses die to national businesses, meanwhile the national media gets bigger and richer every day.

pradn 5y ago

7% is about a quarter or two of growth, but not a fundamental blow. The upper end of 13.6% is much more painful, but probably still only like a year of growth. Will this make Facebook change its business model and incentives completely - I don't think so. We'll still have to deal with design for engagement and data harvesting/storage/analysis at a grand scale.

whynotminot 5y ago

I wonder if more money will go to “influencers” whose reach can be somewhat more easily well understood. Can’t wait to see more paid placement in content, getting around my paid subscriptions, ad blockers, and “do not track” requests.

tfehring 5y ago

Here's his model: https://docs.google.com/spreadsheets/d/14UkIkzBCfcQzYZagC5qo0lkI-TuaLYlfit2Sz3MfPC4 https://docs.google.com/spreadsheets/d/14UkIkzBCfcQzYZagC5qo... It looks like the 7% and 13.6% figures the article quotes are the initial revenue decreases for a single quarter, which the model assumes would recover thereafter. In general, the model is based on some very, um, stylized assumptions. I'm really skeptical that a 12.5% increase in the number of users who block tracking (from 80% to 90%) would result in a 60% increase in the impact of that blocking on revenue. That said, I don't think the numbers are drastically out of line. Apparently >60% of Facebook's revenue is from iOS, so it wouldn't take that large of a decrease in efficiency for the revenue hit to end up in the 10% ballpark. The main question to me is the extent to which the loss is borne by Facebook or by advertisers. It's possible that advertisers are effectively price-takers and will keep paying basically the same amount despite a decrease in efficiency.

bookofsand 5y ago

According to a sibling comment, ">60% of Facebook's revenue is from iOS". Our society is selling out on privacy and subjecting itself to mass 24/7 surveillance for a paltry 22.5% of Facebook / adtech revenue. In other words, we could outlaw user tracking tomorrow, and Facebook / adtech would continue just fine, with only a moderate haircut. Are we that desperate to milk the last possible $ right now?!