What you need to know
- A new report says that numbers Facebook used in its ad campaign against Apple were not correct.
- Facebook has previously stated new opt-in measures for tracking users will seriously harm its business.
A new Harvard Business Review study shows Facebook numbers used in a campaign against iOS 14 anti-tracking measures were false.
The report summary states:
Apple will soon require consumers to opt-in if they want to allow businesses to track their data and use it for personalized advertising. Facebook is fighting this decision with an aggressive ad campaign, citing evidence that the decision will hurt small businesses. But that evidence turns out to be false, as Facebook surely knows.
The report notes a claim from Facebook in ads and its website stating that Facebook data showed "the average small business advertiser stands to see a cut of over 60% in their sales for every dollar they spend". However, the report notes this is a reference to Facebook's return on ad spend (ROAS) metric. From the report:
In its campaign against Apple's new policy, Facebook is claiming that when it compared the ROAS for campaigns that leveraged personalized information with campaigns that didn't, it found that small businesses would suffer a 60% cut in revenues if they were deprived of personalized advertising.
That scary-sounding number, however, is almost certainly too high. Randomized controlled trials that compare personalized advertising with no advertising tend to reveal much smaller differences.
Further scrutiny of that figure is also leveled at Facebook's claim that small and medium-sized businesses started or increased using personalized ads on social media during the pandemic:
According to Facebook, Apple's decision is especially damaging during this pandemic, because, as Facebook's ads and website state, "Forty-four percent of small to medium businesses started or increased their usage of personalized ads on social media during the pandemic, according to a new Deloitte study."
That number seemed off to us, so we took a close look at the Deloitte study — and discovered that Facebook reported the number incorrectly.
In its study, Deloitte asked companies from nine industries whether they increased their use of targeted advertising on social media during the pandemic. The industry with the largest increase was Telecom & Technology, but the increase was only 34%. Other industries had much smaller increases. Professional-services firms, for example, had an increase of only 17%. Facebook, it seems, cherry-picked the data that best supported its case — and then increased the size of the cherries it picked by a third.