Apple to Facebook! Will suffer record revenue loss
Facebook will lose $10 billion this year due to Apple’s app tracking change on the iPhone.
Facebook’s parent company, Meta, will lose $10 billion this year due to a small but effective change Apple made last year. “Overall, the impact of iOS on our business in 2022 is around $10 billion,” the social media giant said in a fourth-quarter earnings conference call.
In April 2021, Apple gave the user full authority to follow up with the iOS 14.5 update. That permission prevented Facebook apps from tracking thousands of iOS users, and Meta CFO David Wehner said Facebook was causing great damage to ad revenue.
Facebook to lose $10 billion over Apple
Meta’s primary source of revenue is the advertising division, which relies on a massive database of user information from its business of some of the world’s largest social platforms (Facebook, Instagram, and WhatsApp).
Apple eliminated the primary way for Facebook to collect ad data when it gave users the option to block them from tracking these apps in other apps. The change came as part of Apple’s iOS 14.5 update, launched in April 2021, forcing app publishers to add pop-ups asking for permission to track behavior for ad sales.
If users disable this option on their iOS device, Apple will prevent that app from collecting a variety of data by advertisers.
According to initial reports, more than 95% of iPhone users who downloaded the update were disabling ad tracking. Meta estimates that this will result in advertising revenue losing $10 billion next year.
“We can’t be certain about the decline in advertising revenues, it’s just a guess. We work hard to mitigate the impact and try to make ads both more relevant and more effective for users.”
Facebook also reported a first drop in user numbers, resulting in a big hit for parent company Meta’s stock: It fell as much as 25% per share from $323 to $245 and wiped $230 billion off its market value overnight.