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How will Apple's new privacy feature affect Facebook and Snapchat?


As technology companies prepare to deal with apple's new privacy feature as part of the upcoming iOS 14 update, which requires developers to request explicit permission to track iOS users across applications and sites through the IDFA digital advertising ID, MKM Partners analysts say: "Some online advertising companies, such as Facebook and Snap, will be more negatively affected by this feature than other companies."

The plan required the launch of this feature with the launch of iOS 14, but Apple announced last September that it was postponing the launch of the feature until sometime in 2021, to give developers more time to comply.

But how will Apple's new privacy feature affect Facebook and Snap?

Apple will offer two options to choose from: explicit rejection and blocking any app that tries to tracking users by collecting their personal data to target them with ads, meaning that the new feature allows users to share their ad ID (IDFA).

Before using an app, you will be asked to activate or not activate the tracking feature, and although most users are expected to choose the "Ask App Not To Track" option, companies such as Facebook fear that this will affect their business model, thus limiting their ability to target you with ads, which is the essence of their business.


 Companies that currently use a business model for their work use this id, when available, to target you with ads and measure their effectiveness, but this change is expected to significantly affect advertisers' ability to target ads the way they used to be since most users are expected to reject the tracking option.

MKM Partners analysts said they have developed a seven-factor framework to determine the risks of change for online advertising companies: scope, access to first-party data, use of iPhones, input from app installation ads, external advertising, ads purchased by small businesses, and ads purchased by companies that rely heavily on attracting users to pay, which include companies that develop gaming apps, and video streaming.

Based on these criteria, analysts found that Facebook and Snap will be among the companies whose profits will be affected by apple's new privacy changes, followed by Twitter and Pinterest, while analysts found that Amazon and Google will be among the least affected.

In a note issued in December last year, Bank of America analysts also said, "Facebook and Snap are most at risk by implementing these changes, which could lead to a 3% drop in revenue for Facebook and 5% for Snap." They also said that Twitter will see a decrease in downloads of its app, but relatively small compared to Facebook and Snap.

It is worth mentioning that Facebook has been outspoken in opposing this change, where it has posted advertisements in newspapers, and launched a new website, to clarify its opposition to this feature and attack on Apple, where Facebook claims that the new feature will threaten the custom ads on which millions of small businesses depend to find and reach customers.

"Apple's new tracking rules are about profit, not privacy, and we believe That Apple is acting competitively by using control of the App Store in a way that benefits its final profits at the expense of developers and small traders."

In response, Apple said the new privacy feature gives iPhone users more control and transparency about how their data is collected and used for advertising, and that apps will be able to explain the benefits of tracking to users immediately.