The new operating systems for the Mac and iPad were supposed to be the big news this week for Apple. There was a new requirement for developers in the new version of the software. At least for one person.
In order to use Apple's in-app payment system, developers will need to make apps that allow users to post content and then pay to increase the reach or visibility of that content. Thirty percent is how much Apple will collect.
Here's what it says in the review guidelines.
3.1.3(g) Advertising Management Apps: Apps for the sole purpose of allowing advertisers (persons or companies that advertise a product, service, or event) to purchase and manage advertising campaigns across media types (television, outdoor, websites, apps, etc.) do not need to use in-app purchase. These apps are intended for campaign management purposes and do not display the advertisements themselves. Digital purchases for content that is experienced or consumed in an app, including buying advertisements to display in the same app (such as sales of "boosts" for posts in a social media app) must use in-app purchase.
The first part of the paragraph deals with apps that allow you to place ads outside of your area. Facebook has an app to create and manage advertising campaigns. This change doesn't affect those types of ads.
Giving Apple 30 percent of your money is not good news if you build a business that allows people to create content and then pay you money to boost it. Before the change, you had to keep 100 percent of the money you charged because people wanted to see it. Apple is going to get 32% of that money.
Losing a third of the money you charge for a thing is bad for business. It's bad for Meta, which owns Facebook and other social media sites. This is why.
I don't know how much of Meta's advertising business is random people opening the Facebook app and deciding to boost a post, but it's more than nothing. The company didn't respond to my request for comment.
It's still a problem even if it's only a small amount. Apple doesn't offer any new technology that will make boosted content a better advertising business. This is the first time it has done this type of transaction. Phil Schiller made a point during his testimony that Apple never took a share of developer ad revenue.
This is a business that has been around for a long time. For a long time, Facebook has allowed boosted posts. Now that Meta is successful, Apple would like a cut of the profits.
This is not the first time. A few years ago, the Hey email service got into a public fight with Apple after they blocked updates to the Hey app.
The fact that Apple is branching out is a troubling sign for developers. Meta's advertising business was not the second largest advertising platform because of the App Store. Collecting huge amounts of data about your users to target them with ads is very profitable.
It raises an interesting point, which is that Apple has decided that as long as it gets some of the profit, it will tolerate targeted advertising on the platform. When you're making a profit off the same experiences, it's hard to stand on the moral high ground of protecting users.
Most of Apple's revenue is coming from the App Store. The company has to find new ways to make money from new interactions in order to grow App Store revenue.
The biggest problem for Meta isn't that Apple is coming for some of the money it makes from boosted posts, but that Apple is coming for its business. Apple has made a number of changes that have made it harder for advertisers to advertise on the iPhone.
The requirement that developers request permission before they are allowed to track users was included in the latest version of Apple's mobile operating system. The change resulted in a loss of $10 billion in revenue, according to Meta.
Meta did not reply to my inquiry, but it did give a statement to The Verge that said that Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy. Apple used to say it didn't take a share of developer advertising revenue. We want to make it easy for small businesses to grow their businesses on our apps.
Apple has been growing its own advertising business at the same time it's making it harder for platforms like Facebook. There are more ads in the App Store. If Apple builds a real advertising product, it could pose a threat to Facebook.
Apple has perfect knowledge of all transactions on its platforms. It has both the technological and financial ability to grow an advertising business. In the past, it hasn't been very successful, but if it is, it could be the end of Facebook.
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