Thursday, December 9, 2021

Apple’s App Tracking Transparency Policy has reportedly cost Social Media Giants upwards of $10 Billion in revenue

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Apple officially introduced its App Tracking Transparency(ATT) feature back in April of 2021 and this gave iPhone owners more control over their data and the purposes for which it was used.

Unfortunately, there are two sides to this as despite it benefitting the users, this step has resulted in a reduction in revenue for several social media companies, a thorough investigation reveals that this decision has created an estimated loss of nearly $10 billion.

Apples app tracking transparency measures

According to the Financial Times, Social Media companies such as Meta, Twitter, YouTube, and Snapchat suffered revenue hits that amounted to $9.85 billion as a result of Apple’s App Tracking Transparency feature kicking in.

Due to its massive size in comparison to other social media companies, Meta(formerly known as Facebook) reportedly lost the most money ‘in absolute terms’ when the figure could be around $8 billion, while Snapchat suffered the worst when it came to measuring the percentage of the company.

Since Snap does not have a desktop application and is exclusive to smartphones, it would make complete sense that they would be hurting from Apple’s decision. Adtech consultant Eric Seufert told The Financial Times that lots of social media platforms would have to rebuild from scratch as a result of ATT.

“Some of the platforms that were most impacted, but especially Facebook(now Meta), have to rebuild their machinery from scratch as a result of ATT. My belief is that it takes at least one year to build new infrastructure. New tools and frameworks need to be developed from scratch and tested extensively before being deployed to a high number of users.”

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For those that do now know how Apple’s App Tracking Transparency works, your iPhone will need to have iOS 14.5 or later to view it and when the feature is available, apps now have to ask users for permission to track their activity for targeted advertising. As you can tell by the numerical figures, a good amount of users opted out of being tracked.

Meanwhile, the last quarter for Apple saw the Cupertino giant’s advertising revenue reach an estimated $18.3 billion, which was a difference of $700 million in comparison to the previous quarter.

Also assuming these social media companies do not change the way they track their users, Apple’s App Tracking Transparency could cost these giants a lot more money in the coming quarters.

Source: Financial Times

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