Apple's Privacy Features Have Cost Social Media Companies Nearly $10 Billion in Revenue

According to the Financial Times, Apple's privacy features have cost social media companies like Meta, previously known as Facebook, Twitter and Snapchat, almost $10 billion in revenue for the second half 2021.

According to the Financial Times, most users have opted-out of Apple's App tracking transparency (ATT) framework. This requires developers to ask users if you want to be tracked on other apps or websites. The report by Lotame, a third party company, shows that Snap, Twitter, YouTube and Twitter lost $9.85 million in revenue in the third quarter and fourth quarters 2021. Snapchat and Facebook were the most affected.

Lotame, an advertising technology firm whose clients include McClatchy and The Weather Company, estimates that the four platforms lost 12 percent of their revenue in the third quarter and fourth quarters. This amounts to $9.85 billion. Snap lost the most percentage of its business due to its focus on smartphones. Facebook, however, suffered the greatest absolute loss because of its size.

ATT has made social media giants like Meta, who rely heavily upon their ad models to be remarkably concerned about the repercussions for giving users the option of being tracked.

Meta has used the narrative that ATT would hurt small businesses that run targeted ads to potential customers. When users are prompted to do so at the initial app launch in iOS or iPadOS, they will be able to tap "Ask App Not To Track" to opt out of being tracked. This app does not have as many data points as it used to display "personalized ads" to them.

Mark Zuckerberg, Meta CEO, blamed Apple's privacy rules for Meta's poor performance last year. Other Meta executives pointed fingers at the Cupertino tech company, claiming that their business would have performed better if it weren't for Apple privacy rules.

Metas revenue suffered a 13.1% percent drop due to ATT. Twitter's revenue suffered a 7.4% decrease. Twitter claimed that it was less affected by ATT because its ads rely more on context than branding and are not focused on mobile habits.