Sunday, March 26, 2023

Nice try, Facebook. IOS changes aren’t bad for small businesses

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It is true that small businesses generally depend on advertising. In recent years, due to the overwhelming popularity of social media and Facebook’s monopoly in this space, it has meant that many small businesses depend on Facebook. But it doesn’t have to be that way: Small businesses would always find other places to advertise in a targeted manner even if Facebook didn’t exist, let alone if its targeting and tracking features. were totally obsolete. Consider the statistics Facebook presented in its ads. What does it actually mean that 44% of small businesses increased advertising during the pandemic? Only that, during the pandemic, more people are stuck at home, and Facebook’s monopoly ad network sees more consumption as a result. More and more businesses are advertising it because more consumers are on the couch looking at their phones. This number doesn’t necessarily indicate that small businesses benefit from advertising on Facebook, just that they don’t have any other option.

The company also notes that without targeting, small business sales would decline by 60% for every dollar spent on Facebook ads. But it’s a potentially misleading number that doesn’t speak to the possibility of these companies identifying alternative places to reach consumers. We already know that without targeting based on personalized optimization, advertising on Facebook would be much less effective. Remember that in the Facebook ad network, the price of ad placement is auctioned, which means that with less efficiency in targeting, the price of Facebook ad would decrease accordingly, which would in turn, would open more marketing dollars for small businesses to advertise elsewhere. The result? Apple’s policy will take a bite out of surveillance capitalism, and will return this excess profit to traditional media and advertising companies that will provide small businesses with a greater variety of opportunities to market their products and services. A more meaningful figure for Facebook would be how well outdated ad targeting options correlate, if at all, to the overall business success of small businesses, and not to their sales rates on Facebook itself. Facebook can search for and possibly report the first one, but it is well aware that such a study would not yield a useful number for their purposes.

Of course, in the short term these changes will cause a few little headaches in updating ad campaigns and code. But people will still want to shop for local produce, patronize mom and dad stores, and donate to their neighborhood charities. Meanwhile, Facebook will inevitably adjust its ad targeting technologies and develop new methods of tracking users in an aggregate and anonymous way across its apps – innovations that will help the ad industry maintain profitability while meeting new compliance constraints. from Apple.

And aren’t these changes the public should want, anyway? Small business owners are ultimately citizens and consumers. They care about privacy, as everyone should, and any increase data confidentialitymarginal or not, is an economic victory for consumers. Small, local and digitally-driven businesses will always be able to compete fairly – and now their owners will enjoy a little more privacy. There are compromises inherent in any policy change; it can be argued that even though advertisers make While experiencing slight success in targeting advertising in the near future, it is no less good for society as a whole given the gains in privacy and individual autonomy that will result as well.

What then is Facebook talking about in its full page ads? Unsurprisingly, the blow hit his own business and business model. The practices of ad targeting and engagement tracking are precisely what makes Facebook so powerful in the digital ecosystem. We know that the largely dominant part –over 98 percent—Facebook’s worldwide revenue, which in 2019 was over $ 70 billion, comes from advertising. Even a 5% success equates to a loss of billions of dollars a year, a reduction that Facebook’s financial community – including capitalists, shareholders, and company executives and staff – don’t want to see.


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