Apple released its highly controversial App Tracking Transparency feature, which forces apps to ask users permission to whether or not they want their data to be collected by third-party developers, almost a year ago.
In 2021, the feature cost social media companies approximately $10 billion in revenue lost from targeted ads with Facebook, Snapchat, YouTube, and Twitter most affected. A new analysis predicts that the same companies stand to lose $16 billion collectivity in revenue this year.
Facebook will take the biggest hit from Apple’s App Tracking Transparency feature in 2022
According to a report by Lotame, major social media companies stand to lose an estimated $16 billion due to Apple’s App Tracking Transparency framework in 2022. The report predicts that Meta will take the biggest hit from ATT.
“The effects of these changes on these companies are hard to isolate because all four players are still growing extremely strongly, still taking share from the last bastions of traditional media and gaining share in digital media as privacy regulations make it harder and harder for independent publishers and technologies to execute,” said Mike Woosley, Chief Operating Officer at Lotame. “To add to the complexity, the pandemic has introduced volatile and unpredictable gyrations in the pacing of media spend.”
The report notes that Snapchat, Facebook, Twitter, and YouTube will continue growing despite the impact App Tracking Transparency will have on their revenue. Out of the estimated $16 billion loss, Facebook represents $12.8 billion while YouTube represents $2.2 billion. Snap could lose out on $546 million in revenue, $323 million for Twitter.
“As we move into the back half of 2022, we will no longer be talking about the impact the Identifier for Advertisers changes had on these players – by then 18 months hence,” added Woosley. “First, we may be moving into a recession. Next, there are other shocks affecting the industry. Third, we’ll be thinking and talking about the next wave of changes and the likely impact on these players (cookies, IP addresses, and GAIDs). Finally, the companies themselves will be telling the market that workarounds and adaptations that they have advanced have cauterized the impact on the business.”
Lotame concludes by saying that App Tracking Transparency’s impact on the advertising industry will lessen in the second half of 2022 due to a possible recession, workarounds, etc. It is expected that ATT’s impact will be “cauterized” as a result of these factors.