Apple’s upgrade to iPhone privacy has cost social media giants including Facebook almost $10 billion so far this year.
Apple rolled out a privacy update in April that forces apps to show users a pop-up window asking for consent to track their activity for advertising purposes. If users select no, Apple blocks that user’s unique identifier for advertisers – a tool that allows advertisers to build up profiles of people and target them with ads.
Lotame, an advertising data company, told The FT that Facebook, YouTube, Twitter, and Snap collectively lost 12% of their advertising revenues in Q3 and Q4 from users choosing to opt-out of ad tracking on Apple devices.
Targeting has become challenging.
Mike Woosley, chief operating officer at Lotame, told The FT that advertisers were getting less value for money from iPhones after Apple’s privacy changes because they had to cast a wider net to target the same people.
Woosley gave a theoretical example of a men’s underwear brand that previously could have gained one customer for an ad targeted at 1,000 men.
Woosley told The FT:
“Now to get 1,000 men you have to show it to 2,000 people because all of a sudden you don’t know who is a man and who is a woman,”
Lotame’s estimates found that proportionally, Snap lost the greatest amount of ad revenue, while Facebook lost the most in terms of absolute spending from advertisers.
Facebook said in August 2020 that Apple’s privacy change could devastate part of its advertising business, and attacked the move in December 2020 with full-page newspaper ads. In January 2021, Facebook CEO Mark Zuckerberg said Apple was becoming one of Facebook’s “biggest competitors.” In March 2021, Zuckerberg said the company could end up in a “stronger position” following Apple’s privacy change.