Ad Revenue at Risk... Apple-Facebook Conflict Intensifies Over New iPhone OS

Apple to Significantly Enhance Privacy Features in New OS Release This Year
Facebook Faces Challenges with User-Targeted Ads, Its Main Revenue Source

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] As Apple prepares to launch a new iPhone operating system with enhanced privacy features, a conflict with the world's largest social networking service (SNS), Facebook, seems inevitable. This is because personalized advertising, a major source of Facebook's revenue, will become more difficult.

According to the Wall Street Journal (WSJ) on the 26th (local time), Facebook stated that mobile advertising revenue could be reduced by about half due to the enhanced privacy features of the iPhone operating system iOS 14.

Facebook's main source of revenue is advertising, and it has earned significant profits through personalized ads for users. Facebook's advertising model uses an advertising program called 'Audience Network' to display personalized ads on mobile apps by utilizing various user information collected from apps, and receives commissions from advertisers.

Ads are selected based on keywords searched by users on the Facebook app and various activities, and are displayed through mobile websites.

Currently, it is known that more than 1 billion people are exposed to personalized ads at least once a month through Facebook's Audience Network.

The problem is that Apple's new operating system iOS 14, scheduled for official release to users this year, significantly strengthens privacy features, which may make Facebook's personalized advertising difficult.

Facebook stated, "Users of devices with iOS 14 installed will either not be able to see ads through the Audience Network or will see less relevant ads."

Facebook did not disclose the revenue scale generated through the Audience Network.

However, considering that in 2018 Facebook paid $1.5 billion (approximately 1.8 trillion KRW) to other mobile apps that displayed ads from the Audience Network, it is expected that the revenue Facebook earns from advertisers is much higher.

This content was produced with the assistance of AI translation services.