Facebook Recovering after Warning of Apple Privacy Rules Led to Weakness

·1-min read

By Dhirendra Tripathi

Investing.com – Facebook stock (NASDAQ:FB) was attempting to bounce back Thursday after its warning of damage from changes to Apple's (NASDAQ:AAPL) privacy rules led to a 4% drop in its price in the previous session.

The stock was up 1.0% in premarket trading.

Facebook Vice President of Marketing Graham (NYSE:GHM) Mudd’s comments that the company is likely understating the effectiveness of its advertising on Apple devices, steering against the company's previous admission that new privacy features built into the iOS operating system would limit their effectiveness.

Mudd said, Facebook is underreporting web conversions, a metric of advertising impacts, on iOS by about 15%.

The update to Apple's privacy policy, rolled out in the June quarter, make it tougher for apps to track users and source their personal data for ad targeting. Facebook Chief Financial Officer David Wehne had in July said the impact of Apple’s tweaks would be felt at the social media giant in the ongoing quarter.

Mudd reiterated those concerns in a blog post Wednesday and acknowledged that it might have become more expensive for advertisers on the platform. He said measuring the impact of those campaigns has also become more challenging.

The Facebook VP went on to suggest ‘best practices’ to advertisers to get more out of their spending. He said the company will introduce new tools to further help with delivery effectiveness and measurement.

Industry surveys have repeatedly shown that Facebook overstates the effectiveness of its ad targeting tools to advertisers. That hasn't stopped it building and defending an effective duopoly in the online advertising business with Alphabet (NASDAQ:GOOGL)'s Google, however.

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