Apple’s anti-tracking privacy features have already cost social media apps nearly $ 10 billion

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Apple met resistance from Facebook when it started rolling out its new iOS 14 privacy features last year. All iPhone and iPad apps must now let users know what data they collect and for what purpose. But another feature has become a nightmare for companies like Facebook. Apps must ask users if they want to allow tracking, which is an industry first. Facebook – now Meta – has talked a lot about Apple’s new features, especially anti-tracking features.

The social network that makes money by following users on apps and websites to sell targeted ads has tried to turn Apple into a villain. Facebook said Apple’s move would threaten the open Internet and small businesses. After Apple’s Application Tracking Transparency (ATT) rolled out, reports made it clear that many people were telling Facebook and other apps not to track them. A few quarters later, the impact of Apple’s anti-tracking features on social platforms can be properly measured. Apparently, social media apps lost nearly $ 10 billion as a direct result of Apple’s decision.

Apple’s anti-tracking feature works

Users never had control over tracking. But on iPhones and iPads running iOS 14 or later, they finally have a say. They can tell apps like Facebook not to follow them, which is not available elsewhere. Facebook has toned down the campaign against Apple somewhat. But Zuckerberg & co. always talk about the disproportionate impact of Apple’s anti-tracking efforts.

The changes to the iPhone mean that “the accuracy of our ad targeting has decreased, which has increased the cost of results for our advertisers. And . . . measuring these results has become more difficult. That’s what Facebook COO Sheryl Sandberg said on the company’s recent earnings conference call, The Financial Times reports.

The FT Also says that we finally get a feel for what Apple’s anti-tracking features have done to social media. Ad technology company Lotame estimates that Facebook, YouTube, Twitter and Snap lost 12% of their revenue in the third and fourth quarters. It’s $ 9.85 billion. Snap has suffered considerable damage to its advertising business as the app primarily targets smartphones. But Facebook has been hit the hardest, losing an estimated $ 8.3 billion in revenue over the past two quarters.

Apple’s ATT went into effect in April.

Facebook will display prompts in its iPhone apps asking users to allow it to follow them after the iOS 14.5 update. Image source: Facebook

Advertisers always spend money on ads

The cost of Facebook ads has increased over the years, and Apple’s anti-tracking policy has only made the problem worse. This is why Facebook has had a greater impact than other social networks.

But businesses aren’t spending less money on advertising. Advertisers have adapted their strategies in response to Apple’s new privacy features. Some have focused more on Android, where Google has yet to implement similar privacy features. Others have just moved on to Apple’s own advertising business, according to the FT report.

YouTube and Twitter saw similar drops in revenue, although many iPad and iPhone users also blocked these apps from following them. This is because they are executing different advertising strategies.

Twitter saw its ad sales increase 41% in the last quarter. The company explained that its ads are based on context and branding rather than tracking users. Google’s parent company Alphabet already tracks users in its own apps, so it doesn’t rely as much on their tracking on third-party services. YouTube saw an impact, but even there the effect was more limited than on Facebook.

The FT reports that social platforms could continue to lose ad revenue for at least a year. That’s because companies like Facebook will have to rebuild their ad platforms to mitigate Apple’s anti-tracking privacy features.


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