Why Apple’s Privacy Policies May Have Cost Social Media Companies Billions of Dollars

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Conversations and concerns about data privacy and the use of personal information were common in 2021. The focus was often on the world’s biggest tech companies, especially social media providers.

Although Apple has not been spared criticism, it has taken steps to give users more transparency in how they are tracked. For major social media platforms, this could have cost them billions of dollars in revenue.

But why was this the case, and how significant was the impact at a more granular level? Let’s find out.


What has Apple changed in its privacy policies?


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As part of its iOS 14.5 updates, Apple introduced a new feature called “App Tracking Transparency”.

The feature allows users to decide whether they want companies to track their interactions on other apps and websites or whether they prefer not to pass this information on.

App Tracking Transparency is available on iOS, iPadOS, and tvOS.

Advertising is a crucial part of the business models of many social media platforms. Meta (formerly Facebook) relies on targeted ads for over 90% of its revenue. Over 10 million advertisers have partnered with the company.

For Snap, advertising is also key to helping the business thrive. In 2020, ads made up 99% of its revenue.

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Like Facebook and Snap, advertising is crucial to Twitter’s business model. However, this is not as important; this channel represented “only” 86% of its total turnover in 2020.

Related: Is Social Media Doing Society More Harm Than Good?


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Advertising is a crucial part of the business models of many social media companies. Mobile traffic is particularly important to Facebook, and Apple’s changes may have affected the company’s revenue in 2021.

As the Financial Times reported in the summer of that year, Facebook said its growth velocity for the later phases of 2021 could “decelerate significantly on a sequential basis as we go through periods of growth. stronger and stronger.”


Despite this, the company generated more than $29 billion in the second quarter of 2021, which exceeded expert forecasts by more than $1 billion.

It’s hard to gauge the impact of Apple’s privacy policy changes on social media companies. However, the forecast does not look good. Giving users control over how social media companies follow them would have cost YouTube, Snap, Facebook and Twitter a combined $9.85 billion in the second half of 2021.

Related: How to Check Who’s Following You Online

Is everything a disaster for these social media companies?

The companies mentioned may have lost an average of 12% of their revenue due to Apple’s changes. But while those numbers are a lot of money for most companies, it’s important to remember just how rich these social media giants are.

According to Statista, Facebook made nearly $86 billion in 2020, a significant increase from the roughly $70.7 billion generated a year earlier.

YouTube is also far from struggling, although Apple’s new tracking permission features have had an impact on the business. As CNBC reported in April 2021, the company – owned by Alphabet Inc. – was on track to generate between $29 billion and $30 billion in ad revenue by the end of this year.

The impact of changes to Apple’s privacy policy has once again put the subject of data protection in the spotlight. But for the world’s biggest social media companies, it also shows potential warning signs for the future.

Apple has shown that many users do not want their online activity tracked if they can. And in the future, it’s possible that social media companies, along with other prominent tech players, will come under greater scrutiny for their data practices.

Advertising will remain an important cornerstone. But these companies might need to adapt the way they operate if they want to remain as profitable.


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