Since its announcement of the App Tracking Transparency feature on iOS, Facebook has vehemently opposed it and now the popular social media company estimates a loss of $10 billion this year. Although the company reported $33.67 billion in revenue, it was lower than analysts’ expectations. So like before, Facebook blamed Apple’s ATT privacy feature for poor performance at its earnings call.
The ATT privacy gives users the choice to either approve or deny apps’ permission to track their activity across third-party apps and websites. For digital advertisers and apps which collect users’ data to show targeted ads, the ATT feature is bad news because they lose large sums of revenue generated via target ads.
Facebook calls the App Tracking Transparency feature a “significant headwind” for its business in 2022
Forecasting this year’s revenue, Facebook’s chief financial officer, David Wehner said that the ATT privacy feature will cause a great loss of revenue and labeled it as a deterrent to their business.
The impacts of Apple’s privacy measures will represent more significant challenges to Facebook’s business in the next quarter, according to Facebook’s chief financial officer, David Wehner. “And we believe the impact of iOS overall as a headwind on our business in 2022 is on the order of $10 billion, so it’s a pretty significant headwind for our business,” said Wehner.
Furthermore, he accused Apple of deliberately introducing the ATT privacy feature to adversely impact targeted ads businesses like Facebook and to favor Google’s As Search because it earns billions of dollars from Google Search ads. Google Search ads model is based on keywords and not on tracking users’ online activity.
And if you look at it, we believe those restrictions from Apple are designed in a way that carves out browsers from the tracking prompts Apple requires for apps. And so what that means is that search ads could have access to far more third-party data for measurement and optimization purposes than app-based ad platforms like ours.
So when it comes to using data, you can think of it — that it’s not really apples-to apples for us. And as a result, we believe Google’s search ads business could have benefited relative to services like ours that face a different set of restrictions from Apple. And given that Apple continues to take billions of dollars a year from Google Search ads, the incentive clearly exists for this policy discrepancy to continue.
On the other hand, Apple reports that customers’ feedback to the App Tracking Transparency feature has been “overwhelmingly positive”. The company’s CEO Tim Cook said:
The feedback from customers is overwhelmingly positive. Customers appreciate having the option of whether they want to be tracked or not. And so the — there’s an outpouring of customer satisfaction there on the customer side. And the reason that we did this is that — as you know, if you followed us for a while, we believe strongly that privacy is a basic human right and we believed that for decades, not just in the last year or so.