The rules had “upended” the digital advertising industry, he said this month, causing a “frustrating setback” that would push revenue from the Snapchat app well below expectations. Snap’s shares promptly dropped by more than a quarter.
Facebook, Twitter, and YouTube have also seen an estimated $9.85bn in expected advertising revenue vanish since April, when Apple started requiring app developers to seek explicit permission to track users for advertising purposes.
Since then, most people have opted out, making it harder for the platforms to target audiences. Advertisers are shifting their spending elsewhere. This has hit Facebook (or Meta as it has renamed itself) and Snap particularly hard.
Meanwhile, Alphabet is the exception that proves the rule. While advertising on its YouTube video service saw “modest” effects from the Apple changes, Google collects so much personal information directly that it has less need to follow users around the web. Search and other advertising revenues jumped 44 per cent last quarter to $37.9bn
In some ways, the companies damaged by the privacy rules have only themselves to blame. The $400bn digital advertising market has historically relied on an intrusive and unpopular business model. If Apple customers were genuinely unconcerned about tracking, they would not be saying no.
Tellingly, Twitter, where advertisers can choose to target topics rather than individual users, also described the impact of the changes as modest. And a recent survey by Insider Intelligence found that 52 per cent of social media users decided whether to interact with adverts based on whether the platform protects their privacy and data.
It is disturbing that a business decision by one company can crush the revenues of so many others. Yet that happens all the time with the big gatekeeper companies. Apple and Google repeatedly draw criticism and lawsuits for the commissions they charge on smartphone apps. Here, too, a rules tweak can make the difference…