Facebook today provided an update on how Apple’s privacy changes have impacted its ad business. The company had already warned investors during its second quarter earnings that it expected to feel an even more significant impact in its ad targeting business by Q3. This morning, it reiterated that point, but also noted that it had been underreporting iOS web conversions by approximately 15%, which had led advertisers to believe the impact was even worse than they had expected.
According to Facebook’s announcement published to its business blog, this exact percentage could vary broadly among individual advertisers. But it said the real-world conversions, including things like sales and app installs, are likely higher than what advertisers are seeing when using Facebook’s analytics.
Facebook’s stock has dropped by nearly 4% on this news, as of the time of writing.
This is not the first time Facebook has shared misleading metrics. In the past, however, it had inflated its video ad metrics and didn’t quickly act to correct the problem, leading to a class-action lawsuit. In this case, however, the issue with the metrics isn’t making Facebook look better than it is, but worse. The company noted it’s been hearing from its advertising community that they are seeing a larger-than-planned impact to their ad investments on the network, raising concerns.
Facebook offered advertisers a few tips to help them better understand a campaign’s impact and performance in this new era. It suggested waiting a minimum of 72 hours or the full length of the optimization window before evaluating performance rather than making assessments on a daily basis, as before. It also said advertisers should analyze reporting at the campaign level, when possible, as some estimated conversations are reported with a delay. And it suggested advertisers choose web events (like a purchase or sign-up) that are most aligned with their core business, among other things.
To address the issues with improving its measurements, Facebook said it’s working to improve its conversion modeling, accelerating its investments to address reporting gaps, launching new capabilities to track web conversions, and extending its ability to measure in-app conversions in apps that have already been installed. The company said it would work quickly to fix bugs, including one that recently had led to underreporting of approximately 10%, which was previously shared with advertisers.
The company in August explained how it’s been working to adapt its personalized ads business in light of both Apple and Google’s privacy changes and the new regulatory landscape, but those efforts will take time, it said.
Outside of the ad tech updates themselves, Facebook has also been working on new products that would allow advertisers to better position themselves in front of consumers browsing Facebook’s apps. Just last week, for instance, it revamped its business tool lineup with the introduction of new features and expansions of smaller tests that would offer businesses more ways to be discovered. One such test in the U.S. would direct consumers to other businesses and topics directly underneath news feed posts. It also now allows businesses to add WhatsApp buttons to their Instagram profiles and create ads that send Instagram users to WhatsApp business chats.
Facebook has been warning advertisers for some time that Apple’s new privacy features, which allow mobile users to opt out of being tracked across their iOS apps, would cause issues for the way its ad targeting business typically operated. And it repeatedly argued that Apple’s changes would impact small businesses that relied on Facebook ads to reach their customers. When the changes went into effect, Facebook’s concerns were validated as studies found very few consumers are opting into tracking on iOS.