Facebook Blames Apple’s Privacy Changes for Missing Wall Street Q3 Revenue Expectations
Facebook on Monday blamed changes to Apple’s “Identifier for Advertisers” (IDFA) user tracking feature for missing Wall Street expectations on revenue.
The social media giant reported mixed third-quarter financial results, seemingly shrugging off the slew of recent bad headlines driven largely by whistleblower disclosures, reads a new report from Reuters.
Still, blaming Apple’s iOS 14 changes, the social media giant gave light fourth-quarter guidance. The company also said it expects its “metaverse” investments will reduce operating profits by $10 billion USD for the 2021 fiscal year, as it begins breaking out Facebook Reality Labs as its own business segment.
“As expected, we did experience revenue headwinds this quarter, including from Apple’s changes that are not only negatively affecting our business, but millions of small businesses in what is already a difficult time for them in the economy,” Zuckerberg said in the earnings call. “[The] bottom line is we expect we’ll be able to navigate these headwinds over time with investments that we’re already making today.”
Apple began rolling out new privacy features for iOS devices this summer that limited advertisers’ ability to use its IDFA user tracking feature to target users by interest and measure whether they clicked on an ad.
Analysts don’t expect the IDFA changes to have a long-term impact on Big Tech giants, although they do concede it will require firms to invest upfront in costly new solutions.
“IDFA was at the center of the infrastructure for the way these companies did ad attribution and retargeting,” said Eric Seufert, an independent analyst. “They can re-architect — it will just take time.”
Facebook’s Sheryl Sandberg said she thinks that replacing the measurement capabilities afforded by Apple’s IDFA feature will be done “this and next year,” but “targeting is a longer term challenge.”