It is true that small businesses generally rely on advertising. Due to the overwhelming popularity of social media and Facebook’s monopoly in that area, that has meant that many small businesses have become dependent on Facebook in recent years. But it doesn’t have to be: Small businesses would still find other places to target advertising, even if Facebook didn’t exist, let alone if its targeting and tracking features were completely outdated. Consider the statistics that Facebook presents in its ads. What does the fact that 44 percent of small businesses advertised more during the pandemic mean? Just that, during the pandemic, more people linger at home, and Facebook’s monopoly ad network sees more consumption as a result. More companies are advertising it because more consumers are looking at their phones on the couch. This figure doesn’t necessarily indicate that small businesses benefit from advertising on Facebook, just that they have no other option.
The company also notes that without targeting, small business revenue would drop by 60 percent for every dollar spent on Facebook ads. But that’s a potentially misleading figure that doesn’t speak to the possibility that these companies will find alternative places to reach consumers. We already know that without targeting based on personalized optimization, advertising on Facebook would be much less effective. Remember, in the Facebook ad network, ad placement is priced by auction, which means that with less targeting, the price of advertising on Facebook would drop accordingly – which in turn would lead to more marketing budget for small businesses to advertise elsewhere. The result? Apple’s policies will end surveillance capitalism and return those excess profits to traditional media and advertising companies that offer small businesses a greater variety of ways to showcase their products and services. A more meaningful number for Facebook to report would be how disapproving ad targeting options, if at all, correlate with the overall commercial success of small businesses – not their sales on Facebook itself. Facebook may investigate it first and report it eventually, but it is well aware that such an investigation would not return a useful number for their purposes.
Of course, these changes will cause some minor headaches in the short term when updating ad campaigns and code. But people will still want to buy local produce, patronize mom-and-pop shops, and donate to nearby charities. Meanwhile, Facebook will inevitably adapt its ad targeting technologies and develop new methods to track users in aggregated and anonymized ways across its applications – innovations that will help the ad industry remain profitable while respecting Apple’s new compliance restrictions.
And, in any case, aren’t these changes that the public should want? Small business owners are also individual citizens and consumers. They care about privacy, as everyone should – and any increase in data privacy, marginal or otherwise, is an economic gain for consumers. Local and digital small businesses will still be able to compete fairly – and now their owners will have some more privacy protections too. There are trade-offs inherent in any policy change; one could argue that even as advertisers To do a minor hit in ad targeting in the near future, it is nevertheless good for society as a whole, given the gains in individual privacy and autonomy that will also result.
What is Facebook talking about in its full-page ads? Not surprisingly, it has hit its own business – and business model. The practices of ad targeting and engagement tracking are exactly what makes Facebook so incredibly powerful in the digital ecosystem. We know that the hugely dominant share – more than 98 percent – of Facebook’s global revenue, which exceeded $ 70 billion in 2019, comes from advertising. Even a 5 percent hit equates to a loss of billions of dollars a year, a cut that Facebook’s financial community – including capitalists, shareholders, and the company’s own executives and staff – doesn’t want to see.