Apple's App Tracking Transparency policy hurting social media revenue with $10 billion in loss
It's been a long time since we started seeing drastic measures toward unwanted ads, spamming every bit of display real estate wherever they are allowed to put ads on. It wasn't delightful, but that's not the primary concern.
Concerns began to get attention when people realised these ads were tracking personalised information to sell. Some ads may directly benefit by selling their ad-free premium service, but companies providing accommodation space for these ads collect user data.
On one side, the general population may not care for the idea. But if we take a deeper dive, it's easy to realise this data is ruining our privacy in a way. Not all ads are bad, and companies are medium to let customers know of their service. But big tech companies took it a step ahead and started personalised ads. It means users will see more relevant ads that are tailored to interest.
Some companies pay a hefty sum to collect those data, and it's a steady source of revenue. Until we saw regulations cracking in social media giants as they can push as many ads as they want, and it's pretty frustrating.
Government regulations set up the procedure that it is by law necessary for these companies to take permission from users beforehand of how these ads are used. This cost approximately $10 billion in losses for Facebook, YouTube, combined and Facebook took the biggest hit.
App Tracking Transparency (ATT) policy led to social media giants losing as much as 12 per cent of their total revenue within the second business quarter of the year. Apple introduced a new update iOS 14.5, back in April 2021, when the user permission for displaying the ad took off. Ad revenue is enormous, and platforms like YouTube, Google search, Facebook, Instagram solely depend on it. There are a lot of eyes gazing at the venues converting lots of customers. A report published by Financial Times said Facebook suffered through the most significant loss of the year since the ad revenue decreased 'in absolute terms.' The policy update came pretty delayed than expected, and at the same time, advert providers and service enabling ads working in the backend had a clash of measures, as we might expect. FT said, "Facebook has the most to lose because the cost of advertising on its platform has been increasing for years."
With iOS 14.5, iPadOS 14.5 and tvOS 14.5, users permission is required through the AppTrackingTransparency framework to track and access their devices advertising identifier. Twitter also took a smash on their ad viewing complexity as the consent is levelled for literally all types of advertisement. Users must know with prompt why they are trying to track. The AppTrackingTransparency prompt will value will only return true if the user receives the prompt and grants permission. On the other hand, Snap-on only has a platform for mobile, while the rest of the social platform has a desktop version. So, they took the biggest hit as the mentioned regulation falls for mobile devices.
Apples new policy is expected to make advertisers and social media platforms creative with their ad providing medium. Third-party apps in Appstore were previously tracked to collect user data without users' intent, for which Apple is to blame with the advertising business. But with the current adverting policy implemented, we are expected to receive ads from vendors who genuinely care for user experience. We hope no more cheap ads to pop up in the future.
Last December, Facebook heavily criticised Apple's intent on full-page newspaper ads, while other reports say it's because they lost a ton of money. Apps will now be banned from compensating users who agree to get tracked so that they are not lured into the tempting hole to receive digital goods in return for permission.