Facebook Inc.'s stock dropped on Wednesday after the social media giant stated that Apple Inc.'s "privacy changes" continue to affect advertisers.
Advertisers are being stung by an Apple AAPL, +1.69 percent software update that offered consumers more discretion over how marketers tracked their internet behavior. Those who have a newer version of iOS with these options have the option of opting out of ad-tracking activities.
“We’ve heard from many of you that the impact on your advertising investment has been greater than you expected,” Facebook’s FB, -3.99% vice president of product marketing, Graham Mudd, said in a Wednesday blog post. “The cost of achieving your business outcome may have increased and it’s also gotten harder to measure your campaigns on our platform.”
In Wednesday afternoon trade, Facebook shares were down more than 4%.
The issues caused by Apple's upgrade might hurt Facebook's profitability, according to Mudd, who cited the company's July earnings call, in which officials anticipated that problems caused by the new iOS controls would have a greater impact in the third quarter than in the second. He also noted issues with Facebook's shared analytics with advertisers, which have previously harmed the company.
Facebook is under criticism following a Wall Street Journal examination into the company's enforcement methods as it navigates the shifting marketing landscape. According to a blog post from Facebook's Oversight Board, the investigation highlighted "the seemingly inconsistent way that the company makes decisions," and the board plans to look into "the degree to which Facebook has been fully forthcoming in its responses" around cross-checking, or how Facebook reviews content decisions made by some high-profile users.
A Tuesday afternoon story from the New York Times on Facebook's attempt to push favorable news about the social network in front of its users, as well as a Wednesday morning report from ProPublica revealing misuse of the social network's Marketplace service, supplemented the WSJ's findings.
While Facebook's stock dropped on Wednesday, other social media companies performed better. The stock of Twitter Inc. (TWTR, +2.34%) was up 1.9 percent in the session, while Snap Inc. (SNAP, +3.30%) was up 2.7 percent. Alphabet Inc. GOOG, +0.93 percent GOOGL, +0.90 percent, the parent company of Google, was up 1.1 percent.