- Apple’s own targeted advertising business, which is currently limited to the company’s News app and App Store, increased by a modest $700 million during this period.
- According to Seufert, Facebook will eventually need to retool its entire advertising infrastructure to adapt, which will take at least a year.
However, the damage has not been distributed evenly. As indicated by other recent quarterly earnings reports, Snap bore the brunt of the change, losing 25% of its overall value. Facebook (now Meta, although this service and advertising network continue to be known as Facebook)) was also hit harder than most, resulting in a significant decline in expected quarterly earnings. Twitter fared better because its advertising structure is less dependent on personalized characteristics, and YouTube benefited from Google’s advertising program across the web and the Android ecosystem.
According to some analysts, despite the severity of the damage, these studies paint a highly pessimistic picture of the situation. According to the Financial Times, Eric Seufert of Adtech estimated Facebook’s losses for the period at close to $8.3 billion and predicted that the case for the social media giants would only deteriorate in the coming year.
Apple’s own targeted advertising business, which is currently limited to its News app and App Store, saw a modest $700 million increase during this period. Additionally, according to Amazon’s quarterly earnings report, a sizable portion of the business that left the Apple ecosystem went to Amazon. The company performed better than expected during the quarter.
This initial decline in advertising revenue is unlikely to be the only effect of Apple’s stricter privacy policies. Seufert anticipates that Facebook will eventually need to retool its entire advertising infrastructure to adapt, a process that will take at least a year. Around 98 percent of the company’s revenue is generated by advertising, with about half of its personalized advertising network. This could shift toward more contextual advertising, with the contents of a web page or an app determining which advertisement is displayed rather than the user’s personal information.
Meanwhile, many advertisers — including Facebook — are simply avoiding and evading Apple’s new requirements. The company was recently discovered to be using a variety of novel techniques to monitor the areas of users of its smartphone app, perhaps when they have deactivated geolocation data; it uses metadata from images and videos and even accelerometer data to make comparisons the vibration trends of more restricted users to those nearby who are freely sharing their location.