Mark Zuckerberg, CEO of Facebook, has repeatedly criticized Apple’s recent privacy shift, and he emphasized that the Cupertino-based company’s new privacy adjustment will harm small companies during Q3 results.
ATT (App Tracking Transparency) last year, Apple’s new policy requiring applications to ask users first before monitoring their behaviour across various services for personalised advertisements, went into effect in April of last year.
Because apps no longer have access to the IDFA (Identifier for Marketers) tracking system that allowed them to serve more targeted advertising to iOS users, advertisers are left in the dark.
On a conference call following Meta’s fourth-quarter earnings release, CFO Dave Wehner commented, “We anticipate the impact of iOS overall is a negative on our business in 2022.” In the $10 billion range, this is a “very big headwind for our business,” according to CNBC.
What is App Tracking Transparency?
App Tracking Transparency, introduced in iOS 14.5 by Apple, let users control whether their apps monitor them across services. When on, the feature blocks any app from tracking your activity that is not from the firm.
It’s possible that Facebook can monitor your behaviour across its services, such as Facebook Messenger and Instagram without your consent; however, it’s not possible to track your activity on other firms’ applications or websites without your permission.
Each Apple device includes a unique “advertising identification” number, which aids in the targeting and monitoring of advertising campaigns. With this option, marketers cannot access your phone’s advertising identity number, which offers a lot of useful information about how you use your iPhone or iPad.
This is a significant problem for several other websites, including Facebook. According to a Financial Times article, 90% of Facebook’s revenue comes from targeted advertising. More than half of the money generated by other sites, such as Twitter and YouTube, comes from advertising.
Around 80% of iPhone owners selected the ATT feature, which caused a significant revenue loss for these organisations because they were no longer able to follow their customers. That’s why in 2022 Meta anticipates the same thing to happen to its advertising business.
If you haven’t already done so, you’re handing over control of your personal information to firms like Facebook by utilising the IDFA (Identifier for Advertisers). An Apple-provided tool for evaluating marketing efforts, valuing advertisements, discovering new app users, and more. It’s a great way to gauge the effectiveness of a marketing effort.
Such data includes whether or not someone saw an advertisement, either on Instagram, and then either purchased the advertised item directly from Instagram, or whether they went looking for it somewhere else.
Another factor impacting earnings for the social media behemoth is Apple’s new policy. Many reasons might influence the growth of Facebook, including Apple’s new ad privacy feature for advertisements, macroeconomic issues, and low daily active users (DAUs).
Engagement levels are shifting away from items that don’t bring in as much money as Instagram News Feed and Stories, according to Facebook. Reel videos that don’t make as much money are getting more and more attention from viewers, according to this data.
During extended trading on Wednesday, Meta shares fell by 23% in response to Facebook’s warning about these difficulties. Estimated first-quarter revenues are between $27 billion and $29 billion, although experts believe the figure might reach $30 billion.