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Apple Privacy Rules to Blame for Facebook's Lower Than Expected Quarterly Growth

• mrweasel 5y ago
  Facebooks decisions and current issues makes their shareholders look a bit stupid. The shareholders should ask Facebook management how they allowed their growth to be tied to the decisions of a completely unrelated third party company, or how the company failed to secure research which will harm their reputation (such as it is), if it got out. Whether you like or hate Facebook, it's hard to see Zuckerberg as anything but a failing CEO at this point. He continues to create problems which harms the Facebook brand. He has allowed the companys core product to be partly dependent on the actions of an unrelated company (Apple) who have a completely different business case and agenda. Either through action or inaction he is now forcing countries to start legislation to control companies like Facebook, well Facebook and Facebook companies. Despite all of that, I hear no critic of Zuckerberg as a CEO.
  • MikusR 5y ago
    > The shareholders should ask Facebook management how they allowed their growth to be tied to the decisions of a completely unrelated third party company That's why they are building their own VR/AR platform.
    • 8eye 5y ago
      there are rumors about mobile devices as well
  • JumpCrisscross 5y ago
    > it's hard to see Zuckerberg as anything but a failing CEO at this point I am a consistent Facebook hawk. But to claim shareholders have done anything other than exceptionally well under Zuckerberg is to ignore the evidence. The stock is up. Buybacks are at a record. A $10bn capital spending programme was just announced.
    • mrweasel 5y ago
      Hmm, you're absolutely right, which is kinda weird. I think most would have expected the stock to take a hit. Can I think Zuckerberg is a terrible CEO and not understand how his companys stock price isn't tanking due to mismanagement?
      • xbar 5y ago
        I spent a few moments on this question. I do not think so. Confusing the brand value with the product value in a marketplace with no competition led you to think that he does harm as a face of Facebook. He is a CEO. He is a good CEO by metrics that matter for CEOs. Disclaimer: I do not like him. I do not use Facebook.
      • deleted 5y ago
        [deleted]
    • JKCalhoun 5y ago
      Watching the stock market as a whole, seems like all companies stock is up. Reminds me of the dot-com days when ordinary Joe boasted about the gains of their portfolio when, as it turned out, a monkey throwing darts at the financial page could pick as many winners.
      • mediaman 5y ago
        There is something to this. FB has underperformed the S&P500 recently. Over the 1 year mark, the S&P is up 31%, vs less than 13% for FB. It has underperformed over 6 months as well: less than 7% for FB compared to 9% for the market. It's only until you look back two years and more that FB has outperformed. Most of this is because of a roughly 15% decline in FB stock since mid-September.
      • jokethrowaway 5y ago
        That's inflation for you All the assets which are not cash seems to be going up.
  • Shish2k 5y ago
    > The shareholders should ask Facebook management how they allowed their growth to be tied to the decisions of a completely unrelated third party company Is this something Facebook-specific, or are you suggesting that _every_ company currently making money on iOS is stupid (And presumably Android too, since you’re almost-equally screwed if Google decide they don’t like you)? If that’s the case, what do you suggest doing instead?
    • mrweasel 5y ago
      I don't thinks is Facebook specific, I'm sure other do it too. What I had in mind is that fact that Facebook isn't just an app buy or website you go to. They actively try to collect information about the users. Apple has long been moving towards more privacy, so Facebook shouldn't have been upset that Apple is limiting tracking abilities. It should have been something Facebook saw coming and planned for years ago.
    • jokethrowaway 5y ago
      Facebook specifically had to push for an open web and just offer FB on web. Someone did a very nice clone a few years ago of a Facebook UI done entirely in the browser and it was snappy even in lower tier androids. It might be harder for other companies, eg games where you need native code to perform well but facebook really has no excuses. They were never going to benefit from walled gardens on mobile. It could be that they lacked skills to optimise a web page, judging from how terrible and heavy their frontend apps are, but I think it was mostly a strategic decision to go native.
  • Someone 5y ago
    So, what should he have done? Even if Facebook had gotten into the smartphone business and conquered a large part of the market, they still would want to have apps for competing platforms. Not doing that would leave money (lots of money, I would think) on the table, and would give the competition an opportunity.
  • Jyaif 5y ago
    > The shareholders should ask Facebook management how they allowed their growth to be tied to the decisions of a completely unrelated third party They tried to sell their own phones to not depend on Apple and Google. That did not work out because it turns out it's super hard. Now they are betting that the next platform is going to be VR/AR, a space where they are currently #1. What else are you suggesting they do? > it's hard to see Zuckerberg as anything but a failing CEO at this point I think he's been doing a really great job. For instance everybody thought their acquisition of Instagram (led by Zuckerberg) was a waste of money at the time. In 2020 Instagram represented 37% of the group's total revenues (which includes Oculus, Whatsapp... and Facebook!).
  • criddell 5y ago
    > I hear no critic of Zuckerberg as a CEO Al Franken was on CNN this morning and he was saying it's time for Zuckerberg to go. He blames a lot of Facebook's problem on Zuckerberg.
  • exolymph 5y ago
    > Whether you like or hate Facebook, it's hard to see Zuckerberg as anything but a failing CEO at this point. > Despite all of that, I hear no critic of Zuckerberg as a CEO. Your perception on both of these points is wildly out of whack from reality.
  • yibg 5y ago
    Aren't the growth of most companies tied to some third party? At the very least most companies can be negatively impacted by a third party decision. Just look at the chip shortage impacting car productions.
• Closi 5y ago
  Oh no, advertisement revenue for the worlds second biggest advertising company is only up 33% year on year(!). These are still insane revenue growth figures, although it does appear that 70% of facebook posts just seem to be ads now, so I suspect a lot of this growth is just based on feeding more ads as a % of content which will clearly lower the user experience in the long run.
  • RNCTX 5y ago
    I'm surprised no one asks themselves how much of a stretch it would be for Facebook to lie about ad revenue when it repeatedly lies to advertisers about ad metrics.
    • yaseer 5y ago
      It's harder (though not impossible) to lie about revenue as a public company when your accounts are audited annually. Online metrics aren't subject to the same level of scrutiny as standard financial statements. It's pretty common to see startups distort their metrics, but far fewer get away with falsifying their accounts. I can imagine a future though when these metrics come under more legal scrutiny, just as accounting does now.
      • ikerdanzel 5y ago
        Many companies are audited annually that fake the books and gone. Not saying FB doing this, but there are plenty of precedents and those are the ones caught with their pants down. FB can easily be doing this and get off easily. If there is poor regulatory (America in the past 2 decades have conclusively demonstrated that) plus immense pressure to deliver numbers even against reality, it is a hard devil temptation to ignore.
      • vmception 5y ago
        Public companies routinely "restate earnings results" years later after a whole new C-Suite is saddled with the problem and after all the prior personnel and traders at the time of the original earnings already got their profits. It is disingenuous to say this is working well, assuming "well" means "prevent lying because 'audit'". It is working well for generating profits with minimal consequences for anyone.
• xbar 5y ago
  Working as intended.
• m3kw9 5y ago
  I’m not getting how apple can stifle them that much when FB knows who already logged in and is seeing the ads. Can anyone elaborate?
  • josefx 5y ago
    They probably want access to all your contacts with their phone numbers and email so they can build better graphs about your social circle and build shadow profiles on all your friends. If you go further you can probably find hundreds more interesting data points like constant location tracking or full access to any media file mixed with face recognition software. In short: Your phone is a goldmine of information not only on yourself but anyone you know.
    • piva00 5y ago
      Even using accelerometer data to gather movements' data points and be able to retrace steps to have a rough localisation. It's "tracking technology" in the most literal sense.
  • somedude895 5y ago
    As far as I understand: 1. You're on a website about pets, which has FB code on it: Facebook can't link that activity to your account anymore, which means they'll have less accurate info about you that might be relevant to advertisers. 2. You see an ad on Facebook and then go to that website to make a purchase -> FB can't link that purchase to your profile and as such a) can't tell the advertiser whether their ads are effective b) can't use that data to optimize the campaign for users like you who might also be likely to buy.
    • 8eye 5y ago
      that’s a pretty good description. a lot of people are not old enough to remember having to watch ads that were uninteresting and not applicable to them. so people will see more unrelated junk on their newsfeed
      • 5y ago
• dzink 5y ago
  The Facebook Ad buyer Facebook groups (meta, I know) have been in panic for the past few weeks as a lot of people report their previous targeting settings are no longer producing results. Some or unaffected or doing better, but there is definitely a quality fallout for advertisers and that can lower sales of facebook ads quickly.
• marketingtech 5y ago
  In response to: how did Apple do this? Mobile app advertising on iOS has long relied on Apple's IDFA - Identifier for Advertisers - a random, device-unique, resettable identifier that was available to all apps. An app like Candy Crush would tell ad networks like FB that "IDFA 123456 just installed the app" or "IDFA 654321 just made a $5 in-app purchase." FB could then recognize that IDFA as a user who installed the FB app, and they could use that data to target, optimize via ML, and measure the audience and results of Candy Crush's marketing campaign. Apple's recent iOS update made IDFA an app-level opt-in, so in order for this existing advertising mechanism to work, you needed to opt-in to tracking on FB (so they could associate your IDFA to a FB user) AND to opt-in to tracking on the other apps (so they could send ad networks data with your IDFA). This double opt-in obviously has a super low rate. FB wasn't impacted nearly as much as other advertising businesses because they already have identifiers for their users (email, phone number, etc), have a ton of first-party interest/behavioral data, and they mostly run ads on their own properties. Apps who used third-party ad networks to sell and place ads in their apps had their business completely destroyed. I think this is all fair in terms of user choice and to give Apple control of their own platform, but it opens Apple up for a lot of regulatory scrutiny given that they were able to flip a switch that annihilated a $50b mobile advertising industry, while making their own equivalent data collection opt-out (vs their competitors' opt-in). Even then, Apple frames their data collection option as "Personalize your experience" while forcing other apps to use the phrase "Allow this app to track you." Apple's own ads product has tripled its market share since this launched. [0] [0] https://www.ft.com/content/074b881f-a931-4986-888e-2ac53e286b9d https://www.ft.com/content/074b881f-a931-4986-888e-2ac53e286...
  • otterley 5y ago
    > but it opens Apple up for a lot of regulatory scrutiny given that they were able to flip a switch that annihilated a $50b mobile advertising industry There is an implicit but unsupported assumption in this statement that the advertising industry has a right to this data, and that taking it away from them is somehow wrong.
  • soneil 5y ago
    I feel like I repeat this every time it comes up, but I think it's important to note that Apple didn't "flip a switch that annihilated a $50b mobile advertising industry". They gave us the switch and we flipped it. If 90%+ of users opt-out, perhaps the ad industry needs some introspection beyond our ability to opt-out.
• mparr4 5y ago
  FWIW I run a D2C brand and the iOS 14 change hurt badly. We are able to attribute something like half of the sales we used to. The main consequence of this is the FB models can't learn who our customers are as well, resulting in an increase in our cost of customer acquisition. It makes selling niche products much harder.
  • phh 5y ago
    Am I understanding correctly that your issue is merely about attribution, and not that advertisement is actually less useful?
    • ruhdgjns 5y ago
      It goes hand in hand. First, if you can’t measure conversions and tie them back to advertising, then how can you know if it’s effective? Second, if you can’t measure effectiveness how to A/B test your approach? Finally, without labeled data how you train ML models? The whole house of cards stood upon attribution.
      • phh 5y ago
        > First, if you can’t measure conversions and tie them back to advertising, then how can you know if it’s effective? I don't think Coca Cola needed attribution to know their ads were effective in 1900, maybe we should ask them? > Second, if you can’t measure effectiveness how to A/B test your approach? You can still use either time, geographical or UA-based AB testing without requiring attribution > Finally, without labeled data how you train ML models? Are you saying the final objective of tracking is actually to feed AGI as most data about our world as possible? That's an interesting point of view, I never thought about ML modeling as an end-goal.
        • ruhdgjns 5y ago
          I don’t think you’re engaging in good faith. You can answer your own retorts if you think about it from the view of a modern advertiser.
• politician 5y ago
  It sounds to me like Apple destroyed Facebook's competitors in the mobile ad space with relatively modest impact to Facebook.
  • 8eye 5y ago
    yes, mom and pop companies suffered the most
    • ArchOversight 5y ago
      Mom and pop companies didn't have their ad framework embedded into hundreds of applications to do cross-application tracking in the first place.
• api 5y ago
  Great news, it means it's working! Lower growth in Facebook is like lower growth in cancer, heart disease, opioid addiction, etc.