Facebook revenue chief says ad-supported model is ‘under assault’
Facebook Chief Revenue Officer David Fischer said Tuesday that the economic models that rely on personalized advertising are “under assault” as Apple readies changes that would limit the ability of Facebook and other companies to target ads and estimate how well they work.
The change to Apple’s identifier for advertisers, or IDFA,will give iPhone users the option to block tracking when opening an app. It was originally planned for iOS 14, the version of the iPhone operating system that was released last month. But Apple said last month it was delaying the rollout until 2021 “to give developers time to make necessary changes.”
Fischer, speaking at a virtual Advertising Week session Tuesday morning, spoke about the changes after being asked about Facebook’s vulnerability to the companies that control mobile platforms, like Apple and Google, which runs Android.
Fischer argued that though there’s “angst and concern” about the risks of technology, personalized and targeted advertising has been essential to help the internet grow.
“The economic model that not just we at Facebook, but so many businesses rely on, this model is worth preserving, one that makes content freely available, and the business that makes it run and hum, is via advertising,” he said.
“And right now, frankly, some of that is under assault, that the very tools that entrepreneurs, that businesses are relying on right now are being threatened. To me, the changes that Apple has proposed, pretty sweeping changes, are going to hurt developers and businesses the most.”
Apple frames the change as preserving users’ privacy, rather than as an attack on the advertising industry, and has been promoting its privacy features as a core reason to get an iPhone. It comes as consumers are increasingly wary about their online privacy following scandals with various companies, including Facebook.
Fischer said the company plans to “defend” its existing model.
“There are different business models out there. Apple has one that sells luxury hardware or subscription services, mainly to consumers like us who are fortunate enough to have a lot of discretionary income in some of the world’s wealthiest countries,” he said. “That’s fine, but I don’t think it’s appropriate to then dictate that has to be other business models, and the one that we believe is so valuable, one that relies on advertising, in our case, personalized ads, to enable free products, enable businesses to launch and grow and thrive, we’re going to defend that. And we think it really important that not just we but our industry does that.”
The comments come about a month after Instagram CEO Adam Mosseri said the company will push back on the IDFA change, arguing that it would be “problematic” for small businesses.
Apple has also been in a protracted legal battle with Fortnite creator Epic Games since Aug. 13, when Epic Games published a version of Fortnite to the Apple App Store that included a method for users to pay for in-game content without giving Apple its usual 30% cut. Apple removed the app from the App Store, and Epic Games sued Apple later in the day.
Meanwhile, a congressional report on Big Tech and antitrust has been delayed as the House Judiciary subcommittee on antitrust received new information on Facebook’s acquisition of Instagram, CNBC reported Monday. The report is expected to conclude the more-than-yearlong investigation into Apple, Amazon, Facebook and Google and to suggest potential areas for reform in the antitrust laws.
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