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Apple's anti-ad-tracking iPhone feature took a '$10bn' chunk out of social network revenues
What's that, the world's tiniest violin playing?
In a move bound to incite a collective "diddums" from industry watchers, Apple's decision to change the privacy settings on iPhones has left an estimated $9.85bn crater in the revenues of Facebook, Snap, Twitter, and YouTube.
Introduced in April, the App Tracking Transparency led to the number of Facebook and Instagram users on iOS agreeing to be tracked for targeted ads falling drastically in the week since Apple's iOS 14.5 debuted.
The App Tracking Transparency framework in iOS 14.5 requires companies to ask permission to observe the activities of iOS app users – that is to say, to link application usage and data with user or device information collected from other sources for targeted advertising or analytics.
In a seemingly defensive move, Facebook responded by presenting users of its iOS Facebook and Instagram apps with alerts advising them that if they enable tracking, they can "Help keep Facebook free of charge."
New calculations from advertising technology specialist Lotame suggest that the result has been non-trivial in terms of what social networks can charge advertisers for connecting them with their many billions of users.
The study, reported in the Financial Times, says most users have decided to opt out, taking data away from advertisers, which have in turn reduced their spending with Snap, Facebook, Twitter, and YouTube and moved to other platforms, including Apple's own advertising business.
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The research estimates that these four social media companies faced a 12 per cent fall in ad revenue over two quarters, equivalent to around $9.85bn.
"While we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS," Spiegel said in his prepared remarks.
The FT argued that, far from falling, app-based ad spending has merely migrated to other outlets, such as TikTok, which is cheaper than Facebook.
But, with annual revenues of around $84bn, the social media bête noire looks set to survive for some time before Apple inflicts a fatal blow. ®