“Completely Running Blind.” Apple’s Power Move To Kneecap Facebook Advertising Is Working.

Facebook can survive its scandals, but Apple’s anti-tracking initiative is doing meaningful damage to its business.

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Facebook this week dispatched its high-level executives to ask customers to hang in there. They weren’t, of course, visiting to discuss the Wall Street Journal’s recent exposé of the company’s unsavory practices. But instead, Facebook VPs, including Simon Whitcombe and Graham Mudd, spoke to advertisers about Apple’s anti-tracking initiative, the one thing wreaking immediate harm on the company’s ad effectiveness and its bottom line.

“This is where, when something actually affects their business, they get their shit together and they move,” said one Facebook advertiser who attended the meetings.

“It’s been all hands on deck for many weeks,” said Mudd in an interview.

Apple is indeed doing more damage to Facebook than any of its rolling series of scandals so far. The changes Apple made in iOS 14.5 — asking people if they wanted to opt-out of apps tracking them across the web — is causing tumult for advertisers who rely on Facebook to sustain their businesses. Performance marketers, i.e., those who want you to buy immediately after clicking, are particularly struggling. The masses, they believe, have opted out of letting Facebook track off of Facebook, so they can’t be sure if people are buying their products after seeing their ads. Facebook expects them to spend less money as a result.

“Just completely running blind” is how Aaron Paul, a performance Facebook marketer, described it. Paul said his company, Carousel, moved from spending millions of dollars each day on Facebook to a few hundred thousand dollars. Before the iOS changes, Facebook generated 80% of the traffic Carousel sent to its product pages. Now it accounts for 20%.

Apple’s iOS changes may lead to irreparable harm to Facebook’s ad business. This moment has demonstrated to Paul and his fellow performance buyers that relying on one…