For years business owners and marketers have relied heavily on Facebook ads to promote their websites and mobile apps. Apple’s recent iOS 14.5 privacy update, however, has dramatically changed the game. 

Just a few years ago Facebook ads were all the rage. They were cost effective, offered powerful demographic targeting and drove conversions in a big way. In 2017 Gary Vaynerchuk was “all in” on Facebook ads, stating, “If you’re a practitioner, if you really had to sell to survive, you would realize that the most under-priced ad product right now is Facebook Advertising. If you had to sell to feed your children, you would put your money there.”

How things have changed. 

Apple’s recent iOS 14.5 privacy update, officially called App Tracking Transparency (ATT), is very bad news for anyone relying on Facebook and Instagram marketing to drive revenue. The update greatly impairs the ability for outside ad networks to collect data on consumers thus making it difficult to track devices and target people. 

It’s also terrible news for Facebook. Their parent company Meta could lose up to $10 billion dollars this year due to Apple’s seemingly simple update.

Let’s take a look at just how the privacy update works on an Apple device.

iOS 14.5 users are now served the below pop-up asking if they want apps (e.g. Facebook and Instagram) to be able to track their online activity.

iOS users can also change their privacy settings to automatically deny all requests from apps to request to track their activity.

Why is Apple doing this?

The ATT privacy update aligns perfectly with the unveiling of Apple Search Ads (ASA), which has, according to a recent Forbes article, displaced Facebook as the best ad network for mobile marketers on iPhone and iPad. In other words, it’s a power play by Apple to subvert Facebook and to take over the online advertising space.

Apple has traditionally been quite protective over what it allows, and doesn’t allow, to impact user experience on it’s products. Years ago Steve Jobs refused to make his products compatible with Adobe Flash, calling it unfit for the modern era. Now over a decade later, Tim Cook and company are once again laying down the gauntlet, this time with Facebook in the crosshairs. 

Now that the bad news is out of the way, let’s end with a bit of positivity. According to Hunch, an automated productions and media buying platform, the ATT update will force advertisers to custom their Facebook campaigns as much as possible, thus putting more focus on things like tracking and conversions. This can lead to reduced CPM’s meaning you’ll actually spend less on campaigns in the long run.

Additionally, the rise of platforms like TikTok are providing new and exciting opportunities. According to Forbes TikTok is Facebook’s biggest threat in terms of ad competition. While this may not be good for Facebook, it’s amazing news for businesses looking for alternative channels to promote their brands.