Apple’s app tracking policy reportedly cost social media platforms nearly $10 billion

Illustration by Alex Castro / The Verge

An investigation by The Financial Times found that Snapchat, Facebook, Twitter, and YouTube lost around $9.85 billion in revenue following Apple’s changes to its privacy practices. Last year, Apple announced the App Tracking Transparency (ATT) policy that requires apps to ask permission to track users’ data. The policy went into effect in April, barring apps from tracking users if they opt out.

Facebook notably criticized the move with a full-page newspaper ad, and thanks to the FT’s report, now we know why company leaders were so frustrated. According to the report, Facebook lost the most money “in absolute terms” when compared to other social platforms due to its massive size. Meanwhile, Snap “fared the worst as a percentage of its business” because its advertising is mainly tied to smartphones, which makes sense for a product that doesn’t have a desktop version.

“Some of the platforms that were most impacted — but especially Facebook — have to rebuild their machinery from scratch as a result of ATT,” adtech consultant Eric Seufert told FT. “My belief is that it takes at least one year to build new infrastructure. New tools and frameworks need to be developed from scratch and tested extensively before being deployed to a high number of users.”

Apple’s new policy will force social platforms and other apps to get more creative with their advertising. Whether this means focusing on Android devices or investing in Apple’s advertising business — which nearly broke its own rules by quietly collecting user data in the same way third-party apps did — they’ll have to figure out another source of revenue that doesn’t involve tracking people on their iPhones.

Comments

Everyone talks about the platforms selling the data but nobody talks about the companies buying these data.
Is all of this lost revenue from ads that somehow were not sold? How is this even accounted for?

This is just like constantly talking about drug traffickers without saying a single word about the fact that they are selling drugs to someone.

I don’t think all companies or businesses know necessarily how the sausage is made. They just buy ad space on Facebook and hope they sell whatever it is they’re selling.

Yeah, would be good to see what kind of companies need targeted ads. My Facebook ads are largely coming from smaller direct to consumer menswear, tech and furniture companies. I see Tylko (furniture) and Nudient (iPhone cases). So legit businesses. What’s the non-intrusive alternative for these companies is the question.

If there isn’t a non-intrusive alternative for them, perhaps they just shouldn’t exist (in their current form at least).

Perhaps not. It remains to be seen if Apple’s own advertising tools will work as well for these companies while also protecting user data.

I think you meant Snapchat, not Apple, in the headline. And 10 billion doesn’t seem that much. I was expecting way larger repercussions. Maybe Apple shouldn’t have given the ad industry that much time to react, and just flipped the switch with iOS 14.

10B is stll significant given that it’s just a part of the ad business limited to just iOS.

None of the numbers make sense, but:

In 2020, global mobile advertising spending amounted to 276.21 billion U.S. dollars. The source projected it would increase to 341.18 billion in 2021.

However -

More than 80% of Alphabet’s revenue comes from Google ads, which generated $147 billion in revenue last year.

Google has been the market leader in online advertising for well over a decade and is expected to command nearly a 29% share of digital ad spending globally in 2021.

So could be about $500 billion total. Or the revenue figures could include all ad revenue, whether or not mobile.

$10 billion is a lot tho, and well worth whatever resources they’re putting into it to fight it, but I think it’s more that they’re fighting a privacy trend than they are fighting this thing specifically. Remember Google itself wanted to change its architecture and advertisers went ape.

at Not Jony Ive – if you apply that total to only Twitter or Snap – then yes that would be a major hit. Seeing as how ALL of Twitters (or Snaps) financials do not add up to 10 Billion.

If however you spread that across FB; Twitter; Snap Youtube then the hit is not so bad. And the revenue hit likely scales based on the value and resources of the given company; FB likely spends more on platform development that Twitter does so they would take a bigger hit.

And contrary to the article’s title; these companies didn’t actually lose anything !! They just did not acquire expected revenue on the scale they had in past years. To lose something they would have had to possess the money in the first place. They simply did not meet projected expectations they spit out to disappointed investors after the fact.

The other side of the coin is that companies invest heavily in Apple’s mobile platform because despite Google/Alphabet proclaiming more per unit phone sales of Android devices; internet and app usage by iOS deviec owners has always been significantly higher.

This becomes a contrast of audiences: more units = android — should equal more return on investment; BUT: more usage = Apple – for some reason Android users do not use their devices as much as iOS users do. SO more screen time on iOS used to equal more ad revenue until Apple provided a method to stop the current ability for compaies to track user (AND LETS BE CLEAR HERE >> Apple DID NOT prevent 3rd party companies from pushing targteted advertising to end users and collecting data >> Apple gave end users the option of stopping advertisers from exploiting themselves while they use their devices).

Good. I like my privacy and will do whatever I can to keep protecting it and opting out of all this tracking as best I can (regardless of platform).

I’m actually glad that Apple’s policy is having real effects on these brands that make their money from tracking ppl’s data

Yeah, I have many pet peeves about Apple but this isn’t one of them. I wish more companies would do that.

It’s not surprising since it’s giving users an easy way to opt out of tracking. I just wish their other privacy policies wouldn’t look so sketchy. The photo one is such a bad idea.

I’ll agree there. That whole photo scanning thing kinda worries me. Granted, I’m on Android so it’s not really affecting me, but I am a bit concerned about the precedent it may end up setting for the whole industry. I guess time will tell.

That’s why you come here to comment on the verge and you use apple cloud services and phones to connect to the internet. You probably also use a virtual assistant like Siri and all that stuff you can’t do without internet. You know why? Because it relies in apple services, this is all on their machines and everything you do with that phone. If you cared that much about privacy you wouldnt be here on internet. Your ISP knows everything about you, your service providers too, and some institutions too. Now sure how allowing every detail of your life on Apple hands is what you define to care about privacy … You are just living at apples disposal, apples big brother schema. There is no privacy when the hash generated are property of a company. What apple sells is an illusion. People believe it.

Actually, I’m not using any Apple services, and I don’t even have any Apple products anymore. I’m actually on Windows and Android nowadays.

That’s the thing about assumptions; they make an "ass" out of "u" and "me."

Tho I agree that our true privacy on the internet is limited. The key is to take as much of it back as we can, regardless of what company’s products we use or what platform we’re on.

Have a better one.

I prefer the framing of this information as "Apple ATT policy prevents an estimated $10bn market value of intrusive user tracking."

That’ll work.

Thank you, Apple! You should have done this years ago. The tile of the article should be Apple’s app tracking policy saved U.S.’s next generation.

Whether this means focusing on Android devices

From an advertisement perspective, I think the average unknown iOS user is still worth more than the Android user you know.

And nothing of value was lost.

..and Apples Ads revenue tripled. They are no better.

View All Comments
Back to top ↑