Meta reports revenue drop, likely due to increasing competition with TikTok and Apple’s ATT feature

Increasing competition from TikTok and the effects of Apple’s App Tracking Transparency continue to negatively affect Meta. The company recently reported its first-ever quarterly drop in revenue causing it to lose almost $30 billion in market value for the day. Shares of the company were also down about 6%.

Meta

Meta experiences first-ever quarterly dip in revenue, analysts predict it will bounce back in 2023

Apple’s App Tracking Transparency framework continues to affect advertisers and social media companies. 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.

Back in April 2022, a report by Lotame forecasted that major social media giants could lose an estimated $16 billion due to Apple’s ATT in 2022. The report said that Meta would take the biggest hit of $12.8 billion.

Apple launched App Tracking Transparency in iOS 14.5. The feature gives users the option to decide if they want apps to track them. Apps have to ask for a user’s permission every time they want to rack their activity across third-party apps and websites. Apple launched ATT as a feature meant to give users control over their data. However, since its launch, digital advertisers have been complaining about how difficult it is to show users targeted ads without collecting their data.

App tracking transparency

The company has also been trying to push Reels and more video content across its apps including Facebook and Instagram in an effort to compete with TikTok.

Now, Meta is reporting its first quarterly dip in revenue. “Tough comps, macro and FX are certainly part of the near-term story, but TikTok competition and Apple iOS changes will both have a bigger impact than expected in 2022,” J.P. Morgan analysts said (via Reuters).

The publication further notes that “many analysts expect Meta/Facebook could return to stronger growth in 2023, but noted the sputtering start to its metaverse dream, as regulators clamp down on big tech firms.”

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About the Author

Asma is an editor at iThinkDifferent with a strong focus on social media, Apple news, streaming services, guides, mobile gaming, app reviews, and more. When not blogging, Asma loves to play with her cat, draw, and binge on Netflix shows.

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