In April, the tech giant Apple made a change to its privacy policy that prohibits advertisers from tracking users without their consent. Analysts predicted that this decision would lead to major changes in the $100 billion mobile ad market led by social networks like Facebook and Snapchat. These fears were confirmed for the latter last week when Snapchat announced that the policy prevented it from measuring the reach of its mobile ads, sending its stock price tumbling by 25 percent.
Then yesterday Facebook announced that it would start focusing more on reaching young adults after ad sales slowed due to Apple’s privacy changes. The social network’s poor earnings report built on previous problems including accusations from whistleblowers, an hours-long outage, and antitrust investigations. Facebook claims that Apple’s actions could possibly harm small businesses that rely on personalized advertising to break through on social media. At the same time, experts expect that brands on Twitter will largely avoid negative repercussions since 85 percent of the platform’s ad sales come from promotions from individual accounts.
While companies are more likely to purchase targeted banner ads to appear on Facebook, they often reach out to specific influencers on Twitter for sponsored posts. Although Facebook cannot replicate this strategy on its flagship site, Instagram marketing already operates largely through influencers who are paid for posting individual advertisements. Google, meanwhile, is also protected from Apple’s changes since most of its ad revenue comes from desktop computer traffic and Android mobile devices.
Questions:
- How has Apple’s change to its privacy policy impacted operations at social networks like Facebook and Snapchat?
- Why are companies like Twitter and Google largely immune to the effects of Apple’s privacy policy change?
Sources: Sheila Dang and Nivedita Balu, “Facebook Ad Revenue Seen Feeling Brunt of Apple Privacy Changes,” Reuters, October 25, 2021; Sarah E. Needleman, “Facebook Posts Slower Sales Growth With Apple Privacy Policy,” The Wall Street Journal, October 25, 2021.