Apple's privacy features will cost Facebook $12.8 billion in 2022

Posted:
in General Discussion edited April 13
Almost 12 months after Apple launched App Tracking Transparency, a new analysis predicts its second year will still see major disruption to advertiser, with Facebook, YouTube and more collectively losing around $16 billion.

Not everyone will have gotten their App Tracking Transparency options right first time.
Not everyone will have gotten their App Tracking Transparency options right first time.


Apple released its App Tracking Transparency (ATT) feature in iOS 14 on April 26, 2021, and it immediately had an impact on companies relying on advertising revenue. By July, it was estimated to be causing a 15% to 20% revenue drop for advertisers.

Then Facebook's Mark Zuckerberg has reported that his company would see a $10 billion revenue hit for 2022. In October 2021, Snapchat parent company Snap saw its stock price fall 25% over fears regarding the impact of ATT.

Now a new analysis by research firm Lotame says that ATT is continuing to have an impact - even though it is lessening. Alongside ATT, Apple deprecated its old IDFA (Identifier for Advertisers) technology, but it has introduced new frameworks to help advertisers, and they appear to be being adopted.

"[For its second year] we think the IDFA change will have an impact on the companies of nearly $16 billion," says Lotame in its report. "Again with the lion's share of that impact (81%) coming from Facebook."

That 81% for Facebook represents an estimated $12.8 billion. Lotame estimates the rest of the lost revenue as $546 million for Snap, $323 million for Twitter, and $2.2 billion for YouTube.

However, Lotame describes both Snap and Twitter has having "largely shrugged off" the situation. Each is adapting to using the new measurement systems provided by Apple, for instance.

Then, too, Facebook is working to decrease its reliance on Apple, and is reportedly providing advertisers with new tools.

Despite the forecast of a $16 billion hit to revenues in the second year of ATT, Lotame even says that it will not continue researching the topic. Lotame says that it expects "other shocks" to affect the advertising industry, and that by the second half of 2022, ATT's impact will have been "cauterized."

Read on AppleInsider

Comments

  • Reply 1 of 11
    rob53rob53 Posts: 2,988member
    Good. I have to wonder how many people actually read the ads being presented or even buy what’s being hocked. 
    SGilbertwilliamlondon
  • Reply 2 of 11
    viclauyycviclauyyc Posts: 829member
    It is rare to have good news these days 
    SGilbertwatto_cobra
  • Reply 3 of 11
    gatorguygatorguy Posts: 23,395member
    Much of the reason Google's ad revenues seem barely affected (in fact up since ATT began rolling out) is that search ads don't rely on user data anyway, being completely interest-based. 

    Display ads are a different beast, but Google is far less reliant on them compared to Facebook. In addition Google had already started transitioning to Modeled Conversion* which doesn't need user tracking to show ad results, and that was before Apple announced App Tracking Transparency. 

    The entire online ad-industry is in flux, and some companies will just be better equipped for the challenges. Facebook appears to be ill-prepared.

    *Modeled conversions use data that does not identify individual users to estimate conversions that Google is unable to observe directly. This can offer a more complete report of your conversions. This approach is in direct contrast with non privacy-safe tactics like fingerprinting, which relies on heuristics, such as IP address, and attempts to identify and track individual users. Google has a strict policy against utilizing fingerprinting for ads personalization, as it doesn't allow reasonable user control and transparency.

    edited April 13 lkruppLukeCagemuthuk_vanalingam
  • Reply 4 of 11
    DAalsethDAalseth Posts: 2,118member
    Very good!
    williamlondonwatto_cobra
  • Reply 5 of 11
    StrangeDaysStrangeDays Posts: 12,120member
    gatorguy said:
    Much of the reason Google's ad revenues seem barely affected (in fact up since ATT began rolling out) is that search ads don't rely on user data anyway, being completely interest-based. 

    Display ads are a different beast, but Google is far less reliant on them anyway compared to Facebook. In addition Google had already started transitioning to Modeled Conversion* which doesn't need user tracking to show ad results, and that was before Apple announced App Tracking Transparency. 

    The entire online ad-industry is in flux, and some companies will just be better equipped for the challenges. Facebook appears to be ill-prepared.

    *Modeled conversions use data that does not identify individual users to estimate conversions that Google is unable to observe directly. This can offer a more complete report of your conversions. This approach is in direct contrast with non privacy-safe tactics like fingerprinting, which relies on heuristics, such as IP address, and attempts to identify and track individual users. Google has a strict policy against utilizing fingerprinting for ads personalization, as it doesn't allow reasonable user control and transparency.

    Gosh, just the thing I was wondering in an article about FB. Thanks, GoogleGuy!
    watto_cobra
  • Reply 6 of 11
    gatorguygatorguy Posts: 23,395member
    gatorguy said:
    Much of the reason Google's ad revenues seem barely affected (in fact up since ATT began rolling out) is that search ads don't rely on user data anyway, being completely interest-based. 

    Display ads are a different beast, but Google is far less reliant on them anyway compared to Facebook. In addition Google had already started transitioning to Modeled Conversion* which doesn't need user tracking to show ad results, and that was before Apple announced App Tracking Transparency. 

    The entire online ad-industry is in flux, and some companies will just be better equipped for the challenges. Facebook appears to be ill-prepared.

    *Modeled conversions use data that does not identify individual users to estimate conversions that Google is unable to observe directly. This can offer a more complete report of your conversions. This approach is in direct contrast with non privacy-safe tactics like fingerprinting, which relies on heuristics, such as IP address, and attempts to identify and track individual users. Google has a strict policy against utilizing fingerprinting for ads personalization, as it doesn't allow reasonable user control and transparency.

    Gosh, just the thing I was wondering in an article about FB. Thanks, GoogleGuy!
    From the AI article:
    "That 81% for Facebook represents an estimated $12.8 billion. Lotame estimates the rest of the lost revenue as $546 million for Snap, $323 million for Twitter, and $2.2 billion for YouTube."

    Some readers might have assumed Google may be getting personal tracking info, or at least preferred treatment, because of their Apple search agreement and almost certainly unaware Google Search isn't based on user tracking anyway. 



    Don't be so opposed to being better informed "just because".   
    muthuk_vanalingam
  • Reply 7 of 11
    geekmeegeekmee Posts: 573member
    You don’t make a fuss, unless one’s over the target.
    watto_cobra
  • Reply 8 of 11
    A better title might be: Facebook will lose $12Bn because it can’t convince users to opt-in to continuous location sharing and monitoring of web browsing habits outside of Facebook…

    ok it’s a longer title but you get the point…
    photography guyfred1watto_cobra
  • Reply 9 of 11
    sphericspheric Posts: 2,223member
    So sorry not sorry.
    williamlondonwatto_cobra
  • Reply 10 of 11
    I don’t know how this actually translates into billions in lost revenue. (Isn’t it like estimating the $ lost for lost sales due to Napster (those sales were never going to be made))
    In this case there is X$ in advertising budget which is going to be spent, and whereas before you could get better metrics or more targeted ads when attempting to reach Apple customers  (a valuable demographic which you still want to reach) so you still spend the money but don’t get as good metrics on the success of any campaign. More like in the old days putting up billboards and buying print ads. 
    I suppose you might spread you advertising budget around to different players Google etc  but I suspect FB will still get its share of the pie. 
    I suppose all I’m  saying is I take these numbers with a huge grain of salt 
    watto_cobra
  • Reply 11 of 11
    Good job Apple!
    watto_cobra
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