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Apple's App Tracking Transparency sealing Meta's fate

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If you have been following the recent news on Meta (formerly Facebook) you may have read that Meta recently projected their ad revenue will be cut by a staggering $10 billion in 2022 due to Apple’s new App Tracking Transparency feature (also known as ATT). This has resulted in Meta’s stock to plummet by over 20%.

Photo by julien Tromeur on Unsplash - modified by Beolle

So what is Apple’s ATT and how does it impact ad revenue?

Apple has been releasing multiple privacy features for the last few years. This included Apple’s Mail Privacy Protection and Apple’s App Tracking Transparency feature. You can learn more about Apple’s Mail Privacy Protection in our earlier post by clicking here. 

Apple’s App Tracking Transparency (ATT) was launched in iOS 14.5 and iPadOS 14.5 where it prompted users to select if they wanted the app to track their activities across other apps on the device. The prompt is displayed when the user opens an app like Facebook or Instagram for the first time on iOS 14.5 or higher. When prompted if user selects not to be tracked then the user’s activities across other apps cannot be tracked thus significantly lowering the efficacy of the ads presented to the user by ad platforms like Meta. This in turn reduces the conversion of the ads resulting in reduced revenue for the ad platform. 

Given that Meta relies heavily on ad revenues from their portfolio of apps on mobile devices ATT seems to be having a disproportionate impact on Meta and similar social media platforms. Post Meta’s earnings call similar social media platforms like Snapchat, Twitter and Pinterest also saw a significant dent in their stock price.

This also exposed the influence of Apple on companies like Meta, Snap, Twitter and Pinterest due to the sheer volume of apple devices on which these companies rely on their advertising revenue.

What do you think? How would Meta adapt to these privacy changes in the coming months?

References:
Anonymous

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