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Article by Jaspreet Bassi
The revenues that Meta receives from ads have been reduced following changes to Apple’s privacy policy with the iOS 14.5 update.
Apple’s new privacy policy has been welcomed by many iPhone users who are now provided with greater control of their data, but it has undercut Meta’s business model.
Apps such as Facebook are required to get explicit consent from their users to track what their users are doing on their phones. This tracking is advantageous to advertisers on Facebook as it enables them to create targeted and personalised advertisements that users are more likely to engage with.
However, following the new policy, Facebook’s ad targeting is less accurate because it knows less about its users. This means advertisers will have to spend more money to reach people on iPhones, and this is an unlikely prospect for many businesses due to the current inflationary pressures. In April 2022, 75% of mobile users opted out of app tracking, and as a result, Facebook’s revenue fell by $10bn from ads in 2022.
It may now appear that Facebook will never be as effective on iOS as it used to be. This is indicated by Mark Zuckerberg (the CEO of Facebook and Meta), too, as he has made a renewed push into selling various products on Instagram and Facebook. Facebook can generate good revenue from these sales, but the data that Facebook can legally capture about its users, without interference from Apple, could be invaluable. Facebook cannot tell a store if someone saw their ad on the app, then clicked through to the store’s site or app and bought something – but it can tell them if a Facebook user saw the ad on Facebook and then bought the shoes on Facebook. But this may be less attractive to advertisers due to the allure and rise of TikTok. This could provide a further impetus for the metaverse. If the metaverse does materialise, Mark Zuckerberg will have built a platform where he and his advertisers can interact directly with its users without interference from Apple or anyone else.
