Week 15 Part B: What We Can Learn from FaceBook Analytics

"Research into how the changes that Apple has made to their privacy practices has impacted FaceBooks ability to collect data to share with their Business customers."

Last year, Apple changed how its mobile operating system that powers the iPhone (iOS), handled users’ privacy preferences. It introduced a new privacy feature, App Tracking Transparency (ATT), which gives more control to iPhone users on whether or not they want to be tracked by advertisers online across apps. This makes it harder for app-makers and advertisers to follow user behavior.

While this may have helped Apple with its aggressive stand on in-app privacy protection, social media platforms like Facebook, Twitter, TikTok, and others are losing revenue due to the stronger privacy wall that reduces their ability to collect data on users for personalized advertising. Targeted ads are a big source of revenue for social media platforms. 

The feature, first introduced in iOS 14.5, directly affected this business model. ATT makes it tough for them to target users. Facebook’s parent company Meta earlier this year said Apple’s new privacy feature will decrease the social media company’s sales in 2022 by about $10 billion.

Once advertisers realized that it is tough to target users, they started cutting back on their expenses, which meant loss of business for the big tech companies. As per a Financial Times report, Snap, Facebook, Twitter and YouTube saw a revenue loss of an estimated $9.85 billion since Apple’s changes. The revenue fall has hit Facebook the most in absolute terms because of its size.

In the past few months, Meta has initiated a mass layoff that may reduce its workforce by as much as 20,000 employees, nearly 23% of its staff globally, as part of Mark Zuckerberg's plans for a “year of efficiency” in 2023.

Meta recently reported a profit of $7.5 billion for the first quarter of 2023, down 21 percent from a year earlier. The results followed Meta’s dismal financial report in February, when the company also posted falling profits and slowing user growth. The next day, Meta’s stock plummeted 26 percent and its market value plunged more than $230 billion in the company’s biggest one-day wipeout ever. The two quarters were the company’s first back-to-back profit declines in over a decade, a sign of the difficulties it is encountering with a slowdown in online ad spending and increased competition from other social media platforms.