Stock Groups

Facebook says it underreported ad performance after iPhone privacy update


Facebook told advertisers in a blog post Wednesday it underreported ad performance on iPhones, citing privacy changes Apple made to its iOS operating system.

Facebook believes it had underreported web sales on Apple’s iOS by around 15% in the third quarter. It also noted that different advertisers can have different results.

Graham Mudd, Facebook’s Vice President of Product Marketing, stated in a blog that “we believe real-world conversions like app downloads and sales are greater than what is being recorded for many advertisers.”

Facebook shares dropped more than 2% on Wednesday morning.

Facebook’s CFO David Wehner spoke out about the possible impact of iOS updates on July earnings calls. He said he expects to see more of these changes in the third quarter. Apple’s update made it so that iPhone and iPad users would have to choose to opt-in to being tracked when first launching an app. Facebook and other apps use specialized tracking to deliver better personalized ads.

“We’re optimistic about our multi-year effort to develop new privacy-enhancing technologies that minimize the amount of personal information we process, while still allowing us to show personalized ads and measure their effectiveness,” Mudd wrote in Wednesday’s blog post.

Facebook offered several suggestions to advertisers for improving their understanding of ad performance. The recommendations include taking longer to analyse data in order to avoid delays, and looking into additional measurement tools.

Facebook stated that it is already working on improving ad performance measurement. This includes accelerating investments to fill reporting gaps before the holiday season.

Subscribe to CNBC on YouTube.

WATCH: Facebook battles Apple over user privacy features in iOS update