App Tracking Transparency has hit social media for $10 billion in lost revenue so far

Posted:
in iOS edited October 2021
Apple's privacy push has cost social media companies dearly, with advertising revenue for Facebook, Twitter, Snap, and YouTube down almost $10 billion in the second half of 2021 due to iOS' App Tracking Transparency feature.




The introduction of App Tracking Transparency in April provided a way for users to choose between being tracked in apps and online, or retaining heir privacy. Half a year later, it seems that ATT is making a dent in the incomes of major social media firms.

According to advertising technology company Lotame speaking to the Financial Times, the revenue of Facebook, YouTube, Twitter, and Snap are down 12% in revenue in the third and fourth quarters, for a total of $9.85 billion.

Of the four companies, Facebook had the biggest drop overall due to its size in the advertising market, with that loss thought to be over $8 billion. However, Snap fared the worst as a percentage due to focusing on smartphones.

The reduced revenue is a continuation of early findings shortly after the introduction of ATT. In July, it was reckoned that ATT had caused a 15% to 20% drop in revenue for iOS advertisers.

According to Lotame COO Mike Woosley, advertisers are seeing reduced results when advertising to iPhone users, because most have opted out of tracking for social apps.

In one example, an underwear brand aimed at men would previously gain one customer for a $5 ad spend aimed at 1,000 men. According to Woosley, "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."

As a result, Woosley says "your acquisition costs doubled and the lost yield is 50%."

The loss of tracking has forced companies to work on their advertising systems to deal with the privacy-centric idea. According to adtech consultant Eric Seufert, it could take a year for new tools and frameworks to be produced, as they need "to be developed from scratch and tested extensively before being deployed to a high number of users."

In response to Apple's changes, Facebook CFO David Wehner called ATT "challenging" and "a little bit more disruptive than we anticipated. Alphabet owns enough first-party data to not need to track users across third-party apps, insulating it from its effects.

Apple, meanwhile, saw its advertising business improve, helping Services grow to $18.3 billion for the last quarter. The increased advertising revenue has prompted calls of hypocrisy on Apple's part.

"None of this is altruistic," according to BlueConic COO Cory Munchbach. "Apple has done a great job in turning privacy into a PR play, but they wouldn't be doing this if there weren't money in it."

Read on AppleInsider
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Comments

  • Reply 1 of 26
    lkrupplkrupp Posts: 9,989member
    So iOS users wanting privacy are causing this drop in revenue? That’s a lot of power for a worldwide minority mobile operating system. No doubt the long knives will be out to carve Apple up. When you fuck with Zuckerberg’s money you’re fucking with the wrong asshole. /s
    williamlondonrcfaMisterKitAlex_VfotoformatDogpersonwatto_cobra
  • Reply 2 of 26
    If it's $10B in less revenue for social media companies (which isn't a loss, less revenue is simply less revenue and doesn't mean "loss"), how does that equate to the money that is *still* in the pockets of people who were not quite so duped and manipulated into handing over their hard earned money for products they neither needed nor wanted?

    Seems like this is a very good thing for consumers, screw the social media companies.

    Edit: typo
    edited October 2021 baconstangrcfaMisterKitAlex_VMacProfotoformatDogpersonwatto_cobra
  • Reply 3 of 26
    DAalsethDAalseth Posts: 1,990member
    That's a $10b loss to the social media companies. I seriously doubt the companies placing the ads lost that much, if anything. Imo web advertising, especially targeted advertising has been grossly oversold. I just don’t think it’s effective any more. Companies are realizing that. 
    edited October 2021 baconstangrcfaAlex_Vmuthuk_vanalingamStrangeDaysFileMakerFellerwatto_cobra
  • Reply 4 of 26
    bluefire1bluefire1 Posts: 1,210member
    They shouldn’t have been tracking us in the first place.
    williamlondonbaconstangpulseimagesAlex_VFred257DogpersonrobabaStrangeDayswatto_cobra
  • Reply 5 of 26
    rcfarcfa Posts: 1,124member
    No words needed: 🥂🍾
    williamlondonAlex_VDogpersonsbdudeStrangeDayswatto_cobra
  • Reply 6 of 26
    If there's going to be ads, I like them random.  Sometimes I just click on weird ads to see how it changes my ad feed.
    The last thing I want is to see a ton of ads for the same or similar thing I just bought.
    Alex_VFileMakerFeller
  • Reply 7 of 26
    lkrupp said:
    No doubt the long knives will be out to carve Apple up. When you fuck with Zuckerberg’s money you’re fucking with the wrong asshole. /s
    You're not wrong. Anti-trust laws have long been a tool of bitter competitors and there are reports of a possible antitrust lawsuit against Apple.

    Whether it will succeed and, if so, cause Apple to be carved up are likely a low probability. Still though...yes the long knives are out.

    watto_cobra
  • Reply 8 of 26
    It is interesting how many end users turn off tracking when given the choice.
    Alex_VDogperson
  • Reply 9 of 26
    $10B of unethical money that partially belong to billions of users
    williamlondonwatto_cobra
  • Reply 10 of 26
    MacProMacPro Posts: 19,471member
    May that 'loss' grow exponentially.
    williamlondonDogpersonsbdudebaconstangFileMakerFellerwatto_cobra
  • Reply 11 of 26
    Should the title be. Apple help many businesses  save up to $10 billion on money on what would be wasted targeted ads. 

    Why should the perspective be on the pond life social companies racking in cash in the back of uses data.

    Fred257williamlondonmuthuk_vanalingambaconstangFileMakerFellerwatto_cobra
  • Reply 12 of 26
    Good!  Their harvesting of our information is beyond creep and should be criminal.  Honestly, at this point I think they are doing more harm than good.  
    williamlondonwatto_cobra
  • Reply 13 of 26
    Fred257Fred257 Posts: 164member
    They have been using us covertly without our permission for YEARS. If anything THEY owe us money. 
    williamlondonwatto_cobra
  • Reply 14 of 26
    So an advertising agency can’t figure out how to get a woman to buy mens underwear for men she knows? A mens underwear company can’t create a line of women's underwear? Talk about spinning it for maximum pity effect. 
    edited November 2021 baconstangFileMakerFellerwatto_cobra
  • Reply 15 of 26
    Should the title be. Apple help many businesses  save up to $10 billion on money on what would be wasted targeted ads. 

    Why should the perspective be on the pond life social companies racking in cash in the back of uses data.

    Yes Headlines can be Very Misleading 
    LESS does not equal LOSS

    williamlondonwatto_cobra
  • Reply 16 of 26
    robabarobaba Posts: 226member
    If there's going to be ads, I like them random.  Sometimes I just click on weird ads to see how it changes my ad feed.
    The last thing I want is to see a ton of ads for the same or similar thing I just bought.
    If there’s going to be agitprop, I prefer it to be random.  Let the whole world see it so that it can be countered and neutralized rather than targeted and covert.
    baconstangwatto_cobra
  • Reply 17 of 26
    gatorguygatorguy Posts: 23,364member

    According to Lotame COO Mike Woosley, advertisers are seeing reduced results when advertising to iPhone users, because most have opted out of tracking for social apps.

    In one example, an underwear brand aimed at men would previously gain one customer for a $5 ad spend aimed at 1,000 men.

    According to Woosley, "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."

    As a result, Woosley says "your acquisition costs doubled and the lost yield is 50%."
    "None of this is altruistic," according to BlueConic COO Cory Munchbach. "Apple has done a great job in turning privacy into a PR play, but they wouldn't be doing this if there weren't money in it."

    Read on AppleInsider

    To complete the above truncated quote: “If your ability to advertise on Facebook is no longer economic, you’re going to move away immediately,” he said. “So TikTok is becoming extremely popular because it’s a lot cheaper (from a cost per 1,000 impressions basis).”

    My question is then, how is TicTok doing something that Facebook presumably cannot?  Or does TicToc not track users anyway?
  • Reply 18 of 26
    The business model, based on spying on users without permission is wrong, illegal and it should not have been allowed to exist for so many years. 
    So may this loses just grow higher
    Thanks Apple!
    williamlondonwatto_cobra
  • Reply 19 of 26
    sbdudesbdude Posts: 147member
    Finally, some good news on a Monday.

    Edit: I read it on Monday, and I think that still counts.
    edited November 2021 qwerty52FileMakerFellerwatto_cobra
  • Reply 20 of 26
    thrangthrang Posts: 925member
    designr said:
    lkrupp said:
    No doubt the long knives will be out to carve Apple up. When you fuck with Zuckerberg’s money you’re fucking with the wrong asshole. /s
    You're not wrong. Anti-trust laws have long been a tool of bitter competitors and there are reports of a possible antitrust lawsuit against Apple.

    Whether it will succeed and, if so, cause Apple to be carved up are likely a low probability. Still though...yes the long knives are out.

    Well there is no legal right to track people's behaviors, especially surreptitiously, so all Apple did here was add transparency to behaviors and give individuals a choice to be tracked or not. How else would you handle it?

    edited November 2021 baconstangqwerty52StrangeDayswatto_cobra
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