Social Media Firms May See $10B Loss in Sales From Apple Changes

Several social media platforms, including Snap, Facebook, Twitter and YouTube, will see revenues affected drastically by Apple’s privacy settings changes on iPhones, Financial Times (FT) says.

The companies combined lost around $9.85 billion from the change.

Apple’s new App Tracking Transparency policy, rolled out in April, makes it so apps have to ask for permission before tracking user activity and sending out personalized ads. Many users have opted out.

Consequently, advertisers don’t know how to target users.

According to Facebook COO Sheryl Sandberg, the iPhone changes have made it so “the accuracy of our ads targeting decreased, which increased the cost of driving outcomes for our advertisers. And … measuring those outcomes became more difficult.”

Facebook is likely the company that will lose the most, due to its increasing costs every year for companies to run ads.

Aidan Corbett, chief executive of Wayflyer, which offers online shopping financing, said companies that can’t get as much out of Facebook advertising are likely to “move away immediately.”

He said TikTok was becoming more popular because it didn’t have the same high costs to run ads.

The report from FT notes that Snap was affected by the sluggish pace of the iPhone changes, as the changes were put out in late April but didn’t start hitting customers at the highest level until a few months later in June.

Twitter saw ad revenue rise 41% in the last quarter, and the company said it hadn’t been affected as much by Apple’s policies because its ads are more about context and branding, rather than on tracking the habits of customers.

And Alphabet has enough first-party user data that it doesn’t have to track users across other apps.

PYMNTS reported that Alphabet’s Google Q3 performance came with new enhancements to search and ads.

Read more: Ad Spend, Connected Initiatives Elevate Alphabet/Google in Q3

Google Ads, the earnings call said, was working with Apple’s changes, with CEO Sundar Pichai saying that “search remains at the heart of what we do.”