Apple’s App Tracking Transparency Will Supposedly Cost Facebook $10 Billion in 2022
Facebook has claimed that Apple’s privacy and App Tracking Transparency (ATT) measures has made an impact. The company claims that it is now more difficult to track users across other apps and websites, resulting in a forecasted cost of $10 billion in 2022.
Facebook held its earnings call yesterday, reporting $33.67 billion in revenue. However, earnings were lower than analyst expectations. Looking into the first quarter of 2022, Meta, formarlly known as Facebook, stated that it expected around $27 to $29 million in revenue during the first quarter of 2022, lower than the expected $30 billion, as reported by MacRumors.
Facebook attributed part of its softer earnings last quarter to the impact of Apple’s improved privacy measures. Calling out the changes to iOS, including Apple’s ATT, the company claims it has had an negative impact on Facebook’s buisness and ability to track users across numerous apps and websites. Chief operating officer, Sheryl Sandberg stated:
“First, ads. Like others in our industry, we’ve faced headwinds as a result of Apple’s iOS changes. As we described last quarter, Apple created two challenges for advertisers. One is that the accuracy of our ads targeting decreased, which increased the cost of driving outcomes. The other is that measuring those outcomes became more difficult.”
Facebook claims that the impact will continue to be felt throughout 2022 as well. Facebook’s chief financial officer, David Wehner said “We believe the impact of iOS overall as a headwind on our business in 2022 is on the order of $10 billion, so it’s a pretty significant headwind for our business,”
Wehner claimed that Apple favoured Google as part of its privacy measures as the ATT expempts browsers. Google Chrome, for instance, does not ask permission to track users across other apps and websites, unlike the measures instilled on Facebook and other apps. Google Chrome does still have the ability to track users and offer personalized ads much easier. “Apple continues to take billions of dollars a year from Google Search ads, [so] incentive clearly exists for this policy discrepancy to continue,” Wehner claimed.
So when it comes to using data, you can think of it — that it’s not really apples-to apples for us. And as a result, we believe Google’s search ads business could have benefited relative to services like ours that face a different set of restrictions from Apple. And given that Apple continues to take billions of dollars a year from Google Search ads, the incentive clearly exists for this policy discrepancy to continue.
It’s not just a drop in revenue that Facebook reported. Daily active users also took a hit throughout the past quarter. This is the first time Facebook went on-record to report a drop. It was said that the company saw 1.93 billion daily active users in the last quarter. By comparison, there were 1.95 billion reported during the previous quarter.