Facebook, Snapchat, Twitter and YouTube have all been impacted by the iOS privacy update rolled out in April.
Changes to the privacy settings on Apple’s iOS devices have reportedly cost Facebook, Snapchat, Twitter and YouTube an estimated $9.85bn in revenue since being rolled out earlier this year.
“The changes are not only negatively affecting our business, but millions of small businesses in what is already a difficult time for them in the economy,” Zuckerberg told shareholders last week while reporting the third-quarter earnings of Facebook, now called Meta.
The revenue loss figure was from US adtech Lotame and reported by the Financial Times. Lotame estimated that the four social media giants lost around 12pc of their revenue in recent quarters, or $9.85bn, with Facebook losing the most in absolute terms and Snap losing the most as a percentage of its business.
Dubbed App Tracking Transparency, or ATT, the feature was first rolled out by Apple in April as an iOS 14.5 update. It turned off IDFA, or identifier for advertisers, by default. IDFA is used by developers to monitor how ads are performing and to target ads at users.
The new measure requires apps to explicitly ask users to turn on data collection capabilities, which prevents advertisers from tracking iOS users without their consent.
With many users opting out of IDFA, advertisers on Facebook, Snap, Twitter and YouTube are in the dark about how to target users and get the most bang for their buck. This has led to many ad companies focusing on Android devices or Apple’s own ad services, according to the Financial Times.
Aidan Corbett, co-founder and CEO of growing Irish e-commerce financing platform Wayflyer, told the Financial Times that Facebook has the most to lose in this scenario because of the high cost of advertising on its platform, one that has been growing for years.
“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.”
Snapchat, also badly hit by the move, recently blamed Apple’s privacy changes for hurting its ad business. Snap shares plunged by 27pc after chief business officer Jeremi Gorman called Apple’s new ad metrics system “unreliable” at an earnings call in October.
Twitter and Alphabet-owned YouTube reported that they have not been as hard hit by ATT as some other tech peers.
Alphabet brushed off the changes in its third quarter last week, reporting a revenue rise of 41pc to $65.1bn. Google advertising revenue rose 43pc to $53.13bn and YouTube ads grew from $5.04bn this time last year to $7.21bn, but chief financial officer Ruth Porat said the iOS privacy changes had a “modest impact” on YouTube revenues.
Twitter also said the impact of iOS changes on its third-quarter revenue was “lower than expected”, and the social platform is preparing for “an ongoing modest impact” in the next quarter. Its ad revenue was up by more than 41pc to $1.14bn, which it said was the strongest year-on-year growth in Q3 reported in the last three years.
“The impact of ATT is likely to vary across ad platforms given the unique mix of ad formats, signal and remediations on each, as well as other factors,” Twitter said in a letter to shareholders.
“The mitigations we have put in place, and the speed with which we have adopted new standards and resulting changes across our technical stack, have contributed to minimising the impact to us.”
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