Markets

Facebook Claims an Apple iPhone Update Will Damage Ad Sales

Facebook (NASDAQ: FB) and Apple (NASDAQ: AAPL), never the best of tech industry friends, are at odds over the latter's upcoming update to the iPhone's operating system. In an official company blog post today, Facebook wrote that due to changes being implemented in iOS 14, "[o]ur ability to deliver targeted ads on iOS 14 will be limited."

"As a result, some iOS 14 users may not see any ads from Audience Network, while others may still see ads from us, but they'll be less relevant," the company said.

A woman using a smartphone.

Image source: Getty Images.

According to Facebook, this will probably mean that, along with the company, app developers will receive less advertising revenue.

A beta version of iOS 14 was released to developers earlier this week. Among its new and enhanced features is a set of anti-tracking measures that limit the ability of advertisers to zero in on a particular user and deliver highly tailored advertising.

Facebook is specifically concerned with its Audience Network advertising business. This allows the social media giant to deliver ads to its users through other apps that they've connected their Facebook identities to. The company doesn't break out the performance of Audience Network in its results; analysts believe its revenue could be in the billions of dollars annually.

Facebook did say that "in testing, we've seen more than a 50% drop in Audience Network publisher revenue when personalization was removed from mobile app ad install campaigns."

Apple hasn't yet officially responded to Facebook's claims.

The potential hit to Facebook's ad revenue wasn't affecting the company's stock on Wednesday. In late afternoon trading, it was up by 7% and had crossed the $300 level for the first time in its history. Apple was up by 1%.

10 stocks we like better than Apple
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of August 1, 2020

 

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Eric Volkman owns shares of Facebook. The Motley Fool owns shares of and recommends Apple and Facebook. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AAPL FB

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More