Apple's Privacy Features Have Cost Social Media Companies Nearly $10 Billion in Revenue
As a result of its privacy features, Apple has cost social media companies including Meta, formerly known as Facebook, Twitter, Snapchat, and YouTube, nearly $10 billion in revenue in the second half of 2021, according to an investigation by the Financial Times.
The Financial Times found that most users have opted out of tracking using Apple's App Tracking Transparency (ATT) framework, a requirement that forces developers to ask users if they wish to be tracked across other apps and websites. Data in the report from Lotame, a third-party company, suggests that Meta, YouTube, Twitter, and Snap lost $9.85 billion in revenue in the third and fourth quarters of 2021, with Snapchat and Facebook being the most impacted.
Lotame, an advertising technology company whose clients include The Weather Company and McClatchy, estimated that the four tech platforms lost 12 percent of revenue in the third and fourth quarters, or $9.85bn. Snap fared the worst as a percentage of its business because of its focus on smartphones, while Facebook lost the most in absolute terms because of its size.
ATT has caused social media giants who rely heavily on their ad models, such as Meta, to be remarkably worried about the repercussions of giving users a choice on whether they wish to be tracked or not.
Meta, in particular, has used the narrative that ATT will hurt small businesses that run targeted ads for potential customers. If users tap "Ask App Not to Track" when shown the prompt on initial app launch on newer versions of iOS and iPadOS, that app has considerably fewer data points to use to show them "personalized ads."
Last week, Meta CEO Mark Zuckerberg blamed Apple's privacy changes for Meta's lackluster performance this year. Other Meta executives also pointed the finger towards the Cupertino tech giant, claiming that its business would have done better if not for Apple's privacy rules.
Meta’s revenue was impacted by 13.1% percent due to ATT, while Twitter was only impacted by 7.4%. Twitter told the Financial Times that it was less impacted because its "ads rely more on context and branding than on tracking consumers' mobile habits."