Well, in regards to what the OP said, this whole "we need to track our users" stuff is bullshit. I see those "highly optimized" campaigns too, when something goes wrong and the SEA people start to cry because somebody stepped in their sand castle.
That's a super interesting question. I suspect it is because Facebook dominates the market for advertising-that-tracks. They're just not as good as other players at advertising-that-doesn't-track.
So when they lost inventory (e.g. for retargetting), that is a direct loss of revenue for them. The question is, what did the company with the budget previously spent on those targetted adverts do instead? Did they buy less well targetted adverts elsewhere? Or up spend on offline marketing? The economic question is, how effective was that - more or less effective?
Obviously losing 10b dollars is bad for Facebook. It isn't clear that it is worse overall for ad spend, or economically.
Because FB is a company on the edge of collapsing.
They aren't innovative, the market is saturated, new users in developing countries are not worth as much as those from "first world countries".
As the users in first world countries are getting more and more aware of all the privacy issues, how FB fails to keep their platforms clean (either from spam or fake news) and other companies starting to like the taste of being valued as "privacy-friendly", the business model of FB is starting to crumble.
They have long only made (more) money because they found more ways to put together all the bits and pieces and breadcrumbs and build profiles they could sell to advertisers.
That age seems to be over (soon), so they are done, too.
You don't need any of that.