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Why Facebook, Twitter, And Youtube Lose Billions Due To Apple Privacy Rule?

Dreaming of being a hotshot tech company, Apple aims to provide privacy to its customers. Yet it wouldn’t mind earning a little more money.

The Apple App Store changed its policy earlier in 2021, limiting the ability of apps to track users without prior consent, which makes targeted advertising more challenging.

It is probable that companies like Facebook and Google will spend less time spying on our iPhone habits. Yet there was a surprising (for us, at least) upside for Apple as well. After implementing the policy change, Apple’s App Store business skyrocketed, according to multiple analytics firms and advertisers.

Apple reportedly increased its share of sponsored app store downloads from 17 percent to 58 percent in the last six months, according to one analytics firm. Advertisers said they were spending more on Apple advertising, rather than Google. Apple’s revenue from this business is expected to double. Through Apple ads, advertisers can get real-time data and retargeting capabilities they can no longer get from Facebook – something that Facebook can no longer offer advertisers.

There is a simple takeaway here if all this business and advertising is too much for you: Apple is wealthier because they are protecting users’ privacy. What’s the point? The App Store feeds will appear less outside advertising, giving Apple more room to host its ads.

A message to Apple was sent, but Mashable never heard back. This new policy is meant to protect users rather than “advantage” Apple, according to Apple!

Smart or Shady?

During the second half of the year, social media platforms like Facebook, Snapchat, Twitter, and YouTube lost over $9.85 billion in revenue due to Apple iOS privacy changes. 

The Financial Times examined the effect of Apple’s App Tracking Transparency (ATT) policy on Snapchat, Facebook, Twitter, and YouTube and found that these companies lost about $9.85 billion in revenue.

Lotame, a tech company in the advertising industry, said the fourth and third quarters of 2021 saw the platforms lose 12 percent of revenue, or $9.85 billion.

Updated iOS App Store policies require tracking permission from app developers. Since April, if users opt-out of tracking, apps cannot track them.

Facebook reportedly lost more money than other social platforms ‘in absolute terms because of its size.

According to a report published on Sunday, Facebook has the most to lose because it has been increasing its advertising costs for years. Apple iOS’s policy has led to the majority of users opting out, leaving advertisers clueless about how to target them.

The response has been a cutback in advertising spending at Snap, Facebook, Twitter, and YouTube in favor of diverting those funds to Android phone users and Apple’s own growing advertising business.

According to Snap, its advertising is primarily tied to smartphones, which hurt its business the most.

Apple’s App Store policies have been criticized by Facebook CEO Mark Zuckerberg, who claims they negatively affect his company’s business.

Zuckerberg acknowledged that the company experienced revenue headwinds in the third quarter after reporting strong Q3 results late last month.

Facebook CEO Mark Zuckerberg says Apple’s changes will negatively impact our business, as well as the economy and small businesses in an already difficult time.

Since the introduction of iOS 14 changes some months ago, Facebook has been harshly critical of them.

In an interview, Facebook COO Sheryl Sandberg has said that iOS 14’s improvements have been most beneficial to Apple’s advertising business.

Previously, How Did Apps Tracked Ads On iOS?

The developer community had access to a wide variety of tools to track user data before iOS 14.5. Using this data together with similar data from around the web, advertisers could then identify aspects of a potential customer and sell this information to other companies and businesses looking for specific marketing segments to target. 

To date, developers have mainly been able to gather user data using an Apple-controlled system, Identifier for Advertisers (IDFA) that’s been in place for almost a decade. Third-party tools and methods are also available.

Apple Takes The Taste Of Its Own Medicine Too!

The company says its apps will abide by the new rules and that Apple’s first-party apps are already not tracking users across multiple apps, so you won’t see it on Apple’s apps.

Apple does, however, use some of those tracks in its App Store, Stocks, and Apple News apps to serve personalized advertisements. The company uses mobile device type, operating system version, location, keyboard language, and carrier details, among others, for serving ads within its app.

Customers are also segmented based on past purchases and account information for better ad targeting on those apps. For the shake of Information security, Apple doesn’t link the information with other third-party profiles, doesn’t sell that information, and uses it only within its apps. There is also a toggle under “Settings > Privacy > Apple Advertising,” which allows this tracking to be disabled.

Are Companies Able To Track Me In Any Case?

If users turn down apps, developers are unable to access them because Apple disables its own IFDA system on an operating system level. The company is also required to maintain your choice when it comes to another way of identifying users. If they do try to sneak around the rules, Apple says that they would be subject to the same punishments as any other developer who violates the App Store terms of service.

The Bottom Line!

It was a welcome change for Apple users when their privacy settings were updated. Even so, Apple is still under investigation for alleged monopolistic practices, which makes it even more puzzling. Even if it wasn’t Apple’s (public) intention to make things tougher for its competitors while adding to the company’s business, we’re sure it doesn’t regret the outcome.

Related: The Metaverse, from reality to virtual! Which one do you choose?

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