Technology
Apple’s privacy policy may cut US tech giant’s revenue by $16 billion
According to the latest report, data management company Lotame’s latest report pointed out that due to Apple’s user privacy policy adjustment last year, technology giants such as Meta, YouTube, Snap, and Twitter will lose nearly $16 billion in revenue in 2022. Among them, Meta will be the most affected, with a loss of $12.8 billion in revenue this year.
Apple launched the App Tracking Transparency on April 26, 2021, requiring app developers to obtain user consent before using Apple’s advertiser identifiers to track other apps and website users.
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As a result, a large number of users choose to block such tracking behavior, causing advertisers and various technology platforms to lose a valuable signal in targeting customers and measuring advertising effectiveness.
The above report pointed out that although it has been almost a year since Apple adjusted its privacy policy, this adjustment is still having a serious impact on major technology platforms.
Lotame believes that in 2022, Facebook’s parent company Meta will still be the most affected by Apple’s adjustment to its privacy policy. Lotame estimates the adjustment will cost Meta’s annual revenue in 2022 a loss of $12.8 billion, equivalent to 9.7% of the company’s total revenue for the year.
Snap’s business, which is almost entirely focused on mobile users, is expected to be negatively impacted by a similar percentage this year, but on a much smaller scale than Meta. Lotame estimates that Snap will lose 9.6% of its annual revenue in 2022, or about $546 million.
Furthermore, Snap has blamed Apple’s privacy policy changes and supply chain shortages for its lower-than-expected third-quarter 2021 revenue. But the company’s performance improved in the fourth quarter of 2021, turning a profit for the first time in the quarter.
Derek Andersen, Snap’s chief financial officer, said in February that while advertisers have begun to recover from the negative impact of Apple’s privacy policy changes since the fourth quarter of last year, “it will take at least a few more. Quarterly” for marketers to fully adapt to the platform’s new advertising measurement and audience targeting tools.
Google’s parent company, Alphabet, has a huge advertising business and a lot of user data, and its search advertising product has not been affected by Apple’s adjustment to its privacy policy.
In addition, the Android operating system’s advertising identifiers are intact, and Alphabet has benefited greatly from advertisers switching to Android users. But the company also said last year that many Apple users opting out of tracking would have “some impact” on YouTube revenue.
Lotame estimates that this “some impact” will reduce YouTube’s revenue by $2.2 billion in 2022, or 6.5% of its total annual revenue. Twitter has also previously said that the impact of Apple’s privacy policy adjustment is “moderate” and will last until the first quarter of 2022.
Investments in product improvements in 2020 and 2021 have paid off, the company said. In addition, compared to many of its peers, Twitter is more focused on brand advertising, a model that sells a brand to a large audience without the need for particularly precise marketing.
Moreover, Lotame estimates that the negative impact of Apple’s privacy policy adjustment on Twitter’s revenue in 2022 will be $323 million, or 5.4% of total revenue. It is reported that the Lotame analysis incorporates a variety of factors.
These include each tech platform’s reliance on mobile devices, the share of iOS users, an average of 65% of consumers opting out of tracking, as well as analysts’ forecasts for each company’s 2022 revenue.
Given that every tech platform business is growing at a fairly rapid rate, the impact is likely to be reflected in slower growth going forward, rather than a direct reduction in revenue. Many things are still subject to change. Industry experts predict that Apple could further disrupt the advertising market by enhancing privacy tools.
At the same time, individual tech platforms may also be affected by supply chain issues and macroeconomic changes. In addition, these technology platforms are testing the waters of e-commerce, allowing merchants to sell goods on their own platforms, a model that does not need to rely on third parties to measure advertising effectiveness.
In addition, from Google’s move to remove cookies from the Chrome browser to the imminent arrival of new privacy regulations, the industry is closely watching for changes. Mike Woosley, Lotame’s chief operating officer, said: “The media system used to be more open and accessible, but over time, the impact of the various changes has been mixed.”
According to reports, Lotame conducted a similar analysis in October last year, when it expected Meta, YouTube, Snap, and Twitter to lose $9.85 billion in revenue in the second half of 2021 due to Apple’s adjusted privacy policy.