Apple’s ad-tracking blocker is costing Facebook, YouTube, and Snapchat billions
Apple’s decision to stop cross-platform tracking for social media companies such as Snap, Facebook, Twitter, and YouTube have drastically struck their advertising businesses.
The iPhone maker’s App Tracking Transparency, which it rolled out in April, forced apps to ask for permission before they tracked users to deliver personalised ads.
With many users opting-out, refusing to hand over their data, it has been estimated that the four technology companies have lost 12 per cent of their revenue – the equivalent of $9.85 billion – according to the Financial Times.
Snap, which owns Snapchat, lost the most proportionally due to its focus on the mobile market while Facebook, because of its size, lost significantly more more than the other platforms overall. Experts say that TikTok is becoming a more attractive prospect because it is cheaper than advertising on Facebook.
“Some of the platforms that were most impacted — but especially Facebook — have to rebuild their machinery from scratch as a result of ATT,” adtech consultant Eric Seufert told the Financial Times.
“My belief is that it takes at least one year to build new infrastructure. New tools and frameworks need to be developed from scratch and tested extensively before being deployed to a high number of users.”
In the wake of its changing policy, however, Apple appears to be consolidating its power in the advertising market.
The Financial Times reported in April that it would be expanding its business following the policy, and company’s head of software, Craig Federighi, told the Wall Street Journal that Apple’s own apps - such as Music, News, Arcade, Fitness, and TV - are exempt from showing the ATT prompt because “they don’t track users across apps they do not own.”
Instagram head Adam Mosseri has said that he would be “happy to adopt the language Apple uses for its own products” as one of a number of critics who argued the change was unfair.
I’d be happy to adopt the language Apple uses for its own products.
— Adam Mosseri 😷 (@mosseri) October 26, 2021
Apple‘s chief privacy engineer has however said the controversial update is an attempt to make sure users “have a great experience and to have their rights be respected”.