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In April, Apple allowed its users to protect their personal data, which is normally used for personalized ads. Applications must first request permission to monitor the behavior of users they want to use to display “custom ads.”
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Apple’s new strategy in the second half of the year deprived networks such as Facebook, Twitter, YouTube and Snap of estimated revenues of $ 9.85 billion (over 217 billion crowns), according to Lotame, an advertising technology company.
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Overall ad evaluation is now much more difficult.
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The changes hit Facebook the hardest
Most users have taken the opportunity to refuse to share certain data. Thus, advertisers did not know how to target these people and responded to the situation by reducing their spending and redirecting their budgets elsewhere. The advertising companies therefore decided to focus primarily on users of phones with the Android operating system and on Apple’s growing advertising business.
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Facebook’s Chief Operating Officer Sheryl Sandberg said Apple’s stance made social ad targeting inaccurate. “It has increased the cost of delivering results for our advertisers. Overall, evaluating ads is also much more difficult now, “Sandberg told The Financial Times.
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Lotame estimates that social platforms lost 12 percent of revenue in the third and fourth quarters, or about $ 9.85 billion. The most affected platform is Facebook, which, according to Eric Seufert, an advertising technology consultant, lost about $ 8.3 billion. In addition, Seufert estimates that the losses are not final.
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Facebook is now in the worst position, as the cost of running ads on its platform has been rising for a long time.
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Mike Woosley, chief operating officer of Lotame, also confirmed to The Financial Times that advertisers now receive less money due to settings on iPhones. As an example, he cited a men’s underwear brand that would gain one customer for one $ 5 ad targeting 1,000 men.
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“To hit a thousand men, you have to show the ad to two thousand people because you suddenly don’t know who a man is and who a woman,” Woosley said. “And you still only have $ 5 for all the impressions. So your acquisition costs have doubled and the lost revenue is 50 percent, “added Lotame’s Chief Operating Officer.
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“Facebook is now in the worst position because the cost of running ads on its platform has been rising for a long time,” Aidan Corbett, chief executive of Wayflyer, which offers financing to start-up e-shops, told the Financial Times. According to him, it pays to place ads more on TikTok, which is gaining in popularity and advertising is much cheaper there.
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Apple’s Twitter strategy doesn’t bother me
Charles Manning, CEO of Kochava, a company that measures the effectiveness of mobile marketing, said it was wrong to think that advertising spending would decrease. “Expenditures are not falling, they are just being relocated. Marketers spend money where they see results, “he told the Financial Times.
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“Some of the most affected platforms, especially Facebook, have to rethink their mechanism as a result of changes in privacy settings and start building it from scratch,” Manning said. According to him, it will take at least a year for social networks to fully adapt to new measures to protect users’ private data.
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The least affected network is Twitter, which described Apple’s intervention as “modest”. Twitter’s ad sales rose 41 percent last quarter. The company said it was less influenced by Apple’s policies because its ads rely more on context and brand than on tracking consumers’ mobile habits.
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