Facebook Underreports Ad Performance Due To Apple’s Privacy Update

Facebook in a blog post earlier told advertisers it underreported ad performance on iPhones, citing privacy changes Apple made to its iOS operating system. Facebook estimated it underreported web conversions on Apple’s iOS by about 15% in the third quarter, noting there’s a “broad range” for different advertisers.

Facebook VP of Product Marketing Graham Mudd wrote “We believe that real world conversions, like sales and app installs, are higher than what is being reported for many advertisers.” Facebook shares were reported impacted by more than 2%.

Facebook CFO David Wehner warned of the potential impact of the iOS changes on the company’s July earnings call, saying he expected to see a greater impact of the changes by third quarter. Apple’s update made it so that iPhone and iPad users would have to choose to opt-in to being tracked when first launching an app. Meanwhile specialized tracking helps Facebook and other apps deliver more personalized ads to such users and in the case where an Apple users opt-out, makes it specialized tracking impossible.

“We’re optimistic about our multi-year effort to develop new privacy-enhancing technologies that minimize the amount of personal information we process, while still allowing us to show personalized ads and measure their effectiveness,” Mudd wrote in Wednesday’s blog post.

In the meantime, Facebook recommended several actions advertisers could take to better understand their ad performance. 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. Those include waiting longer to analyze data to allow for delays and considering using additional measurement tools.

Facebook said it’s already working to improve ad performance measurement. 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.

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.