The relationship between Apple and Meta has been strained lately, and the two sides have clashed over advertising costs. Meta issued a statement on Thursday, February 15, revealing that Apple is charging up to 30% of its social media in-app ads on Facebook and Instagram, and proposing a way to avoid this fee.
According to Meta, Apple updated its App Store guidelines in 2022 to require in-app purchases of digital goods and services on iOS operating systems, and will implement them from this month. This means that businesses that want to boost posts on Facebook and Instagram apps using Meta's enhanced promotion feature will have to pay Apple a service fee equivalent to 30% of their pre-tax ad revenue. This fee is not charged by Meta, but by Apple, the operator of the App Store.
Boosting a post is a feature that allows individuals or organizations to increase the reach of their posts or profiles for a fee, which can help small businesses increase visibility and sales. Meta said they don't want to remove this feature because it would reduce the feature's ability to be discovered by [users] and could hurt small businesses by depriving them of a valuable way to promote their business.
To support millions of small businesses, Meta has come up with an alternative way for advertisers to go directly to Facebook and Instagram websites from a mobile device or desktop computer browser, where they can promote their content with boosted posts, so they don't have to pay Apple's 30% service fee and still have access to all the features they do in the iOS app.
According to Meta, Apple's new fees will be implemented in the U.S. market first, and will be implemented in other countries and regions later this year. If advertisers still want to use boosted posts on Facebook and Instagram apps, they will need to pay upfront to have the funds prepaid into their accounts and pay first to use the feature in the app. Meta will also charge an additional 30% fee to cover transaction fees for Apple's pre-deposited funds in iOS. If an advertiser chooses to add prepaid funds to their payment settings using desktop or their preferred mobile web browser, they will not be charged anything when they use those prepayments to enable boosted posts.
Some ** commented that Meta's announcement is tantamount to a public release of guidelines, encouraging advertising companies to adopt Meta's new workaround to avoid paying Apple a 30% service fee. Apple said in a statement that it has always required in-app purchases of digital goods and services to be made using in-app purchases, and that there have been many successful instances of apps doing just that. Apple also noted that Meta customers will still be able to pay for their campaigns with a standalone app called Meta Ads Manager without paying a commission to Apple, as the app is exempt from the campaign management app.
It's worth mentioning that before Meta announced how to circumvent Facebook and Instagram app fees, Meta CEO Mark Zuckerberg publicly shared his experience with Vision Pro earlier this week. Vision Pro is a virtual reality headset launched by Apple that competes with Meta's Quest 3. Zuckerberg believes that the Quest 3 is "better value for money" and "undoubtedly a better product". February** Dynamic Incentive Program