Facebook announced via its blog this morning that it is abandoning the IDFA, Apple’s proprietary, device-level advertising identifier, in its owned and operated apps. Apple revealed at this year’s WWDC event that it is effectively deprecating the IDFA in iOS14 via an opt-in prompt. With the IDFA withheld from advertising, the entire mobile marketing industry is having to adapt to a new world order of measurement before the release of iOS14 on September 15th. Facebook has proactively initiated that world order today with its announcement:
- Facebook will not attempt to access the IDFA for users of its own apps, and it suspects that performance on the Facebook Audience Network (FAN) may degrade to a point that the network is simply non-viable;
- All advertisers must create new ad accounts in order to advertise to users with iOS14 installed.
Facebook’s announcement is momentous; it is an acknowledgement that the era of deterministic measurement on mobile has passed, and that probabilistic methods are the way forward in attributing installs and revenue to advertising campaigns.
Facebook is in a position to define the new standard, and with its blog post, it did just that: it won’t rely on rough workarounds like sampling from opt-in traffic, but rather, it will build a new measurement infrastructure around probabilistic attribution that is not dependent on platform-specific user-level identifiers being made available to it.
The reality is that the IDFA has always been living on borrowed time, and its deprecation was wholly foreseeable. Facebook, especially, should have expected the “June surprise” that was announced at WWDC; it has been locked in a cold war with Apple since at least 2017, as I detailed in The coming war between Apple and Facebook, published in January 2017.
Without the IDFA, Facebook can no longer build monetization profiles for users based on their activities outside of Facebook’s own constellation of apps. As I outline in the below Twitter thread, most app advertisers had “outsourced” all ad targeting to Facebook and Google, since the duopoly knows which individual people, across the entire mobile ecosystem, spend money in apps.
With the IDFA gone and with Facebook forcing advertisers to create new ad accounts in order to target iOS14 traffic, advertisers will have to lean into the SKAdNetwork framework for ad campaign optimization, using techniques that I describe in this article.
What are the implications of Facebook walking away from the IDFA completely? There are two groups this change impacts: publishers (apps that expose users to ads that are served by FAN), and Facebook. For publishers, Facebook walking away from IDFA (and potentially retiring FAN completely) is a massive problem: it’s not uncommon for high-DAU publishers to generate 20-30% of their ad revenues from FAN.
For Facebook, my sense is that these changes exacerbate the loss of revenue they realize as users adopt iOS14 but they also speed up the company’s recovery from that loss as Facebook fully commits to non-deterministic attribution and measurement. CPMs will compress on Facebook as app advertisers shift away from VO and AEO campaign types back to MAI, and FAN revenue (which I understand to be somewhat inconsequential to Facebook given the margins) will simply vaporize if the network is shut down completely. But at some point, Facebook’s new methodology for measurement will gain enough traction to reclaim lost performance.
I term this the “burn down” (gradual revenue loss as a result of iOS 14 adoption and lack of access to the IDFA) and the “burn up” (gradual return to pre-IDFA ad delivery efficiency as Facebook’s probabilistic methods reach parity with the deterministic measurement used before iOS14):
- Burn Down: by abandoning the IDFA and shutting down FAN (which is a subtext of the company’s announcement), Facebook will take more pain upfront than it otherwise would have. Facebook won’t be able to sample opt-in traffic to inform its models or utilize existing ad campaign settings even as those campaigns are starved of new event data (because all advertisers need to create new ad accounts to target iOS14 traffic);
- Burn Up: as Facebook improves its new probabilistic infrastructure and trains models for advertisers, its revenue decline will abate and it should regain performance efficiency.
While the changes that Facebook announced today are substantial, they are probably over-due, and they represent an embrace of a new era of mobile measurement.
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