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Facebook today provided an update on the impact of Apple’s privacy changes on its advertising activity. The company previously warned investors in its second quarter results that it expected to feel an even greater impact on its ad targeting business by the third quarter. This morning he reiterated that point, but also noted that he underestimated iOS web conversions by around 15%, leading advertisers to think the impact was even worse than expected.
According to Facebook’s announcement posted on its corporate blog, this exact percentage could vary significantly from advertiser to advertiser. But he said real-world conversions, including things like sales and app installs, are likely higher than what advertisers see when they use Facebook’s analytics.
Facebook stock has fallen nearly 4% on this news, at the time of writing.
This is not the first time that Facebook has shared misleading statistics. In the past, however, it had inflated its video ad stats and failed to act quickly to correct the problem, which led to a class action lawsuit. In this case, however, the issue with metrics isn’t making Facebook better than it is, but worse. The company noted that its advertising community has heard that it is seeing a bigger-than-expected impact on its advertising dollars on the network, which raises concerns.
Facebook offered some tips for advertisers to help them better understand the impact and performance of a campaign in this new era. He suggested waiting at least 72 hours or the duration of the optimization window before evaluating performance rather than doing evaluations daily, as before. He also said that advertisers should analyze reports at the campaign level, when possible, as some estimated conversations are reported with delay. And he suggested advertisers choose the web events (like a buy or sign up) that best match their core business, among other things.
To address issues with improving its metrics, Facebook said it is working to improve its conversion modeling, accelerate investments to fill reporting gaps, launch new features for track web conversions and extend its ability to measure in-app conversions in apps that have already been installed. The company said it would work quickly to fix the bugs, including one that recently led to around 10% underreporting, which was previously shared with advertisers.
The company explained in August how it was working to adapt its personalized advertising business in light of Apple and Google’s privacy changes and the new regulatory landscape, but those efforts will take time, he said.
Apart from the ad technology updates themselves, Facebook has also been working on new products that would allow advertisers to better position themselves against consumers browsing Facebook’s apps. Last week, for example, it revamped its line of business tools with the introduction of new features and smaller test extensions that would give businesses more ways to be discovered. One of those tests in the United States would direct consumers to other businesses and topics directly below the news feed posts. It also now allows businesses to add WhatsApp buttons to their Instagram profiles and create ads that send Instagram users to business WhatsApp chats.
Facebook has been warning advertisers for some time that Apple’s new privacy features, which allow mobile users to not be tracked in their iOS apps, would cause problems with the normal functioning of its ad targeting activity. And he’s repeatedly claimed that Apple’s changes will impact small businesses that rely on Facebook ads to reach their customers. When the changes took effect, Facebook’s concerns were validated as studies found that very few consumers opted for tracking on iOS.
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