Apple opt-in tracker blows $10bn hole in rivals' pockets

Facebook, Twitter, YouTube and Snapchat are estimated to have lost lost nearly $10bn (£7.3bn) in advertising revenue since the release of Apple iOS 14.5, which requires users to opt in to app tracking, went live in April.

That is the stark conclusion of a study carried out by ad tech firm Lotame, which claims the four social media platforms lost 12% of revenue in the third and fourth quarters, for a total of $9.85bn.

To be fair, the portents of doom were there six months ago, when analytics firm Flurry revealed that just 4% of ‌iPhone‌ users in the US had actively chosen to opt into app tracking within the first month of updating their device in line with Apple’s App Tracking Transparency (ATT) policy.

According to Lotame, of the four platforms, Facebook has lost the most money in absolute terms – estimated to be over $8 billion (about £5.8bn) – due to its scale, while Snapchat has lost the maximum amount of revenue “as a percentage of its business”, because its advertising in mainly tied to smartphones.

It is claimed that all advertisers are seeing a decline in revenue. Adtech consultant Eric Seufert told the FT: “Some of the platforms that were most impacted – but especially Facebook – will have to rebuild their machinery from scratch as a result of ATT.”

He claims it could take at least a year for new tools to be launched, as they need to be tested extensively before being deployed to a high number of users.

Facebook, which took out press ads in December last year to protest about Apple’s plans, said its rival is being hypocritical, because the move forces businesses to turn to subscriptions and other in-app payments for revenue, from which Apple takes a cut.

Facebook has since admitted that the ATT feature has been “a little bit more disruptive than we anticipated”, also it has vowed to launch “new advertiser experiences and measurement protocols”. The company admitted that the ways digital advertisers collect and use information needed to “evolve” to one that will rely on “less data”.

According to mobile marketing analysts, Apple’s Search Ads have seen a dramatic rise in usage, becoming responsible for 58% of all iPhone app downloads, compared to 17% one year ago. In terms of revenue, it is reckoned Apple could earn $5bn from advertising in 2021, rising to $20bn a year within three years.

However, Apple insists its privacy features are aimed at protecting users. The technologies are part of one comprehensive system designed to help developers implement safe advertising practices and protect users – not to advantage Apple, the company claims.