Improved iPhone privacy protections could cost Facebook $20.9 billion

Improved iPhone privacy protections could cost Facebook $20.9 billion and counting

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Facebook vs. iPhone App Tracking Transparency
Turns out the answer to this question was “do not track” 80% of the time.
Photo: Apple/Cult of Mac

A tweak to iOS privacy settings made in 2021 has already cost Facebook $8.1 billion, and the social-networking company’s losses will increase by another $12.8 billion in 2022, according to an industry report.

Forcing applications to ask permission before tracking their users’ online activity hurt other companies, too. But nowhere near as much as Facebook.

iPhone App Tracking Transparency costs Facebook billions

In spring of 2021, Apple added App Tracking Transparency to iOS and iPadOS. This put a pop-up in applications that let users ask that they not be tracked by advertisers as they used various iPhone/iPad apps.

ATT doesn’t block apps from tracking users. Instead, it gives users the option to block that tracking. Alternatively, they can let their apps track them.

Turns out 80% of Facebook users chose to opt out of tracking, according to a report by Lotame. And Facebook’s ad revenue dropped 40%.

Facebook is known for its social network, but it’s really an advertising company. And its ads became less valuable because App Tracking Transparency made it much harder for the company to build personal profiles on its users.

“We heard from many advertisers, especially small and independent marketers, that they were forced to reduce or eliminate their spend on Facebook because it simply wasn’t effective without the targeting and tracking capabilities inherent in the legacy systems,” wrote Lotame.

Reducing ad revenue for Twitter, Snap and YouTube, too

Facebook isn’t the only company that makes money selling targeted advertising. Twitter, Snap and YouTube are also bringing in less revenue because of App Tracking Transparency on the iPhone. Though far less than Facebook.

YouTube is expected to lose $3.4 billion between 2021 and 2022 after being denied the ability to track users without permission. Twitter could lose $535 million for the same reason.