Mark Zuckerberg hits out against Apple as Facebook's ad revenue dwindles

A war over Apple users being able to turn off tracking via its latest mobile operating system update iOS14 has Mark Zuckerberg and Tim Cook in a fierce duel.

Bowing to worries among Zuckerbeg's festive-season advertisers, Facebook, the world's largest social media platform, laid out a confession: "Apple has announced changes with iOS 14 that will affect how we receive and process conversion events from tools such as the Facebook pixel. Businesses that advertise mobile apps, as well as those that optimise, target and report on web conversion events from any of our business tools will be affected."

Facebook has been fiercely critical of Tim Cook's masterstroke of retiring the Identifier for Advertisers (IDFA) in the iOS14 update.

Not surprising at all. Apple's search ad revenue market share has improved, while personalised advertising has been hit on other platforms - read Facebook, the most.

"Specifically, Apple will require that apps in the App Store that engage in what Apple defines as 'tracking' to show a prompt to iOS 14 users, in accordance with their app tracking transparency framework. Apple's policy will prohibit certain data collection and sharing unless people opt in to tracking on iOS 14 devices via the prompt. As more people opt out of tracking on iOS 14 devices, ads personalisation and performance reporting will be limited for both app and web conversion events," Facebook blogged over the weekend.

"In response to these changes, we will also start processing pixel conversion events from iOS 14 devices and later using aggregated event measurement. This will support your efforts to preserve user privacy and help you run effective campaigns," the company sought to assure.

Cook indeed is doing more damage to Zuckerberg than a series of scandals so far.

The changes made in iOS 14.5 - asking people if they wanted to opt-out of apps tracking them across the web - has users raving.

Advertisers who rely on Facebook to sustain their businesses, particularly the festive season ahead, aren't amused at all.

Performance marketers - those who want people to buy immediately after clicking - are struggling the most.

The masses, they believe, have opted out of letting Facebook track off Facebook, so they can't be sure if people are buying their products after seeing their ads.

Even Facebook expects us to be buying less as a result.

"Just completely running blind" is how Aaron Paul, a performance Facebook marketer, described it on CNBC.

Paul's company, Carousel, has moved from spending millions of dollars each day on Facebook to a few hundred thousand dollars. Before the iOS changes, Facebook generated 80 per cent of the traffic Carousel sent to its product pages. This has crashed to a bare 20 percent.

Beyond the festive season too, Apple's iOS changes are harbingers to irreparable harm to Facebook's ad business.

Marketers have seen that relying on one channel (albeit a very effective one) is risky. So they're looking to diversify. Paul, for example, told cnbc that he has moved his ad budget elsewhere - not only Snapchat and TikTok, "but also silent killers like email".

On Twitter, Facebook marketers seemed to implode in agreement.

"We've heard from many of you that the impact on your advertising investment has been greater than you expected. The cost of achieving your business outcome may have increased and it's also gotten harder to measure your campaigns on our platform. In some cases, this is due to underreporting on our part. Our estimate is that in aggregate we are underreporting iOS web conversions by approximately 15 per cent; however there is a broad range for individual advertisers," FB Vice President Graham Mudd, said.

Storms facing the world's largest social media platform include a Wall Street Journal expose last month that "Facebook Inc knows, in acute detail, that its platforms are riddled with flaws that cause harm, often in ways only the company fully understands".

This is "based on a review of internal Facebook documents, including research reports, online employee discussions and drafts of presentations to senior management".

"Time and again, the documents show, Facebook's researchers have identified the platform's ill effects. Time and again, despite congressional hearings, its own pledges and numerous media exposes, the company didn't fix them. The documents offer perhaps the clearest picture thus far of how broadly Facebook's problems are known inside the company, up to the chief executive himself," the Journal has said.

Facebook was at $303 on April 26 when the iOS14.5 version was launched. It was at $376 on September 14 when the iphone was unveiled - and now bruised at $326.

At $148, Apple has been flat since the iPhone launch, but an impressive 10 per cent up over the past six months.

SEE ALSO:

Google worked with Facebook to undermine Apple's attempts to offer its users greater privacy protections, complaint alleges

Social media company Snap falls as much as 23% after a blow to its Q3 earnings from Apple privacy changes and supply-chain disruption