Meta's record damage stems in part from Apple's policy change, but they're not the only corporation affected.
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| A person holding a phone with the Facebook logo and parent company Meta. Photo: Reuters |
Apple's ambitions to create a more private network environment could have a serious impact on Internet businesses that specialize in profiting from online advertising.
This risk is reflected in the financial report published by Meta on February 3. In it, the parent company of Facebook said that the privacy feature introduced by Apple in iOS last year could cost businesses about 10 billion USD. Coupled with the first drop in daily users since 2004, the dismal news sent Meta's shares down 27% in value and cost the company $230 billion in market capitalization, a record market cap. US stocks.
Meta CEO Mark Zuckerberg said Apple's adjustments and new privacy regulations in Europe represent "a clear trend that there is less and less information available to implement personalized advertising".
Apple has always had a special influence with giant technology corporations thanks to its control of the iPhone. This also shows a huge impact on the shift in the way user information is used, as well as on companies that spend years developing business platforms around the sale of advertising.
"Ads can't be as targeted as they used to be. It breaks business models and can't be fixed with small tweaks. It requires rebuilding the business from scratch," Eric said. Seufert, a media strategist specializing in online advertising, commented.
Many internet companies that depend on advertising also feel the danger of Apple's change, but small businesses appear to be more responsive than Meta.
Snap shares also fell 17%, but quickly rebounded after the company announced a profit. Twitter and Pinterest stock prices also fell after the Meta report, but recovered after a day when Pinterest posted better-than-expected profits.
From iOS 14.5, Apple began to let iPhone users manage their personal privacy through the App Tracking Transparency (ATT) tool. Specifically, applications, websites that want to save and use location, contacts, microphone ... must have the consent of the device owner. Apple even allows viewing data access history on iOS 15, which can check which iOS apps are tracking users.
The above changes are assessed to create long-term impacts. According to a survey of 5.3 million iOS users globally late last year, only 12% of users chose to agree to continue being tracked by apps, while the remaining 88% refused.
This is worrisome for advertisers, who have relied on users' online activity for years to determine customer revenue. Many parties track activity to show about products users have viewed but have not purchased to drive them to order.
Previously, according to Financial Times statistics by the end of 2021, the four major social networks Snapchat, Facebook, Twitter and YouTube will lose about $9.85 billion in revenue after privacy regulations on Apple's platform.
"The most affected platforms, especially Facebook, had to rebuild their mechanisms from scratch after ATT was introduced," said expert Eric Seufert. "I believe it takes the company at least a year to build the new infrastructure. New tools need to be developed from the ground up and tested extensively before rolling out to a large number of users."
Still, privacy activists say Apple's change is welcome in its efforts to combat tracking and put the decision in the hands of users.
"We believe the impact of iOS will be a hindrance to our business in 2022. It costs $10 billion, a significant amount for us," said Meta CFO Dave Wehner.
"We're making solid strides," said Snap Chief Business Officer Jeremi Gorman. The company has introduced its own set of tools for advertisers to measure performance and is being used by 75% of businesses advertising on the platform.
Snap said fourth-quarter revenue of $1.3 billion, up 42 percent year-over-year, and profit of $22.5 million. Daily users grew to 319 million, 20% more than in 2020. Pinterest's revenue last quarter was $847 million, up 20% year over year, while profits fell 16% to 175 million. USD.
Privacy is a key component of an advertising campaign for the iPhone and many other Apple products, but the company still allows apps like Facebook to track users to a limited extent, as long as they don't identify individuals. .
Apple CEO Tim Cook last year made its message clear when he said that the advertising industry had become an ecosystem of "stalkers and peddlers looking to make a quick buck".
Via NY Times
