Facebook may be in stronger position after Apple iOS 14

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Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, 2019 in Washington, DC. Zuckerberg testified about Facebook’s proposed cryptocurrency Libra, how his company will handle false and misleading information by political leaders during the 2020 campaign and how it handles its users’ data and privacy.

Chip Somodevilla | Getty Images News | Getty Images

Facebook CEO Mark Zuckerberg on Thursday said he is confident the social media company “will be able to manage through” Apple’s upcoming planned privacy update to iOS 14, which will make it easier for iPhone and iPad users to block companies from tracking their activity to target ads.

“We’ll be in a good position,” Zuckerberg said in a Clubhouse room Thursday afternoon.

Apple’s upcoming privacy changes will inform users about device ID tracking and ask them if they want to allow it. The tracking is based on a unique device identifier on every iPhone and iPad called the IDFA. Companies that sell mobile advertisements use this ID to help target ads and estimate their effectiveness.

Apple has said that the change will roll out early this spring.

Zuckerberg explained that the change could benefit Facebook if more businesses decide to sell goods directly through Facebook and Instagram.

“It’s possible that we may even be in a stronger position if Apple’s changes encourage more businesses to conduct more commerce on our platforms by making it harder for them to use their data in order to find the customers that would want to use their products outside of our platforms,” Zuckerberg said.

Zuckerberg’s comments are the most optimistic statements Facebook has delivered about how the looming Apple changes may impact the company’s advertising business.

In July 2020, Facebook CFO David Wehner said that Apple’s iOS 14 changes could hurt the social media company’s ability to target ads to users, and in August 2020, the company said the changes could lead to a more than 50% drop in its Audience Network advertising business, which represents less than 10% of the company’s net revenue. The company told investors during its fourth-quarter earnings in January that the impact of Apple’s changes could start to affect Facebook’s business late in the first quarter.

Facebook has prepared for the looming Apple changes by introducing more commerce products.

Most notably, the social media company in 2020 introduced Facebook Shops and Instagram Shops. These features make it possible for brands to list their product catalogs directly on Facebook’s most popular apps, and sell goods directly on Facebook and Instagram.

Zuckerberg on Thursday said that already Facebook has 1 million active shops on its services and 250 million people using shops actively.

“Compared to the early conversations we had about how people would use this across Facebook and Instagram and our product, I think this is something that’s well on track to be something that’s going to be increasingly important to people,” Zuckerberg said.



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