iOS 14 Changes Aren’t Bad for Small Businesses After All

Facebook’s full-page ad campaign claims that Apple’s new policy, which will ask users to opt-in for tracking, will hurt small businesses. While it cannot be denied that small businesses depend on advertising, Facebook’s monopoly on social media and it’s popularity means that many small businesses depend on Facebook.

For example, take a look at the statistics Facebook shows in its ads. What does it mean that 44 percent of small businesses increased advertising during the pandemic? Basically, it means that everybody is at home and more businesses are advertising over Facebook’s monopoly ad network. This doesn’t necessarily mean that businesses benefit from advertising on Facebook, on the contrary: they have no other choice and Facebook makes more money.

Facebook also says that without targeting sales for small businesses would decrease by 60 percent for every dollar spent on Facebook ads. Ads on Facebook without targeting based on personal data simply become far less effectiv. But keep in mind that placing ads on Facebook is priced by auction: less effectiv targetting should lead to cheaper ads on Facebook. Money, that in turn could be used by businesses to advertise elsewhere. This is a chance for traditional media and advertising businesses to offer small businesses a greater diversity of opportunities for advertising.

It’s thus not surprising that the true motivation for the ad campaign is the expected hit to Facebook’s own business model. More than 98 percent of Facebook’s global revenues comes from advertising. Even a small 5 percent drop represents a loss of billions of dollars a year. Obviously, this is something that Facebook’s shareholders, the company’s executives and it’s staff does not want to see.