Transparency of application tracking has hit social networks for $ 10 billion in lost revenue so far

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Apple’s pressure on privacy has cost social media companies dearly, and advertising revenue for Facebook, Twitter, Snap and YouTube fell by nearly $ 10 billion in the second half of 2021 due to the transparency feature of iOS app tracking.

The introduction of application tracking transparency in April provided users with a way to choose between in-app and online tracking or privacy retention. Half a year later, ATT seems to be reducing the income of large companies on social networks.

According to Lotame’s advertising technology in a conversation with Financial Times, Facebook, YouTube, Twitter and Snap revenue fell 12% in third- and fourth-quarter revenue, to a total of $ 9.85 billion.

Of the four companies, Facebook recorded the largest decline overall due to its size in the advertising market, with a loss estimated at more than $ 8 billion. However, Snap did the worst in percentages due to the focus on smartphones.

The decline in revenue is a continuation of early discoveries soon after the introduction of ATT. In July, it was calculated that ATT caused a drop in revenue of 15% to 20% for iOS advertisers.

According to Lotame CEO Mike Woosley, advertisers record reduced results when advertising to iPhone users because most have given up on tracking social apps.

In one example, a brand of underwear intended for men would previously win one customer for $ 5 spent on advertising intended for 1,000 men. According to Woosley, “to get 1,000 men, you have to show it in front of 2,000 people, because all of a sudden you don’t know who’s a man and who’s a woman.”

As a result, Woosley says, “your acquisition costs have doubled, and the lost return is 50%.”

The loss of tracking has forced companies to work on their advertising systems to address the privacy-focused 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 extensively tested before being implemented by a large number of users”.

In response to Apple’s changes, Facebook CFO David Wehner called ATT “challenging” and “a little distracting than we expected.Alphabet has enough first-party data that it doesn’t have to track users through third-party apps, isolating it from its effects.

Apple, meanwhile, has seen an improvement in its advertising business, helping services rise to $ 18.3 billion in the last quarter. Increased advertising revenue has sparked calls for hypocrisy from Apple.

“None of this is altruistic,” according to BlueConic COO Cory Munchbach. “Apple did a great job turning privacy into a PR game, but they wouldn’t have done it if it wasn’t for the money.”

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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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