iOS Privacy Update – Social Media Ads Be Gone

We all spend a lot of time browsing social media platforms on a daily basis. And we all know how they collect our data to build personality profiles that benefit advertisers and target us with tailored content.

iOS 14.5 Update - The Damage Done to Social Media

Well, Apple had something to say about that: NO MORE! Since April 2021, iOS began rolling out privacy updates that prevent advertisers from tracking iPhone users without their consent.

This move had immediate harm on social media’s ad effectiveness, striking them where it hits most – their revenue. Since Apple’s iOS 14.5 debuted, it has cost the likes of Facebook, Snap, Twitter, and YouTube billions of dollars.

So the questions are: How big is the loss? Are all the companies affected equally? It’s all discussed in the following article.

iOS 14.5 – Privacy Comes First

Social media services rely on those who operate mobile devices the most. In fact, around 81% of Facebook users access the app using their mobile, while 1.5% use desktop.

Unfortunately, such social networks couldn’t care less about their users’ privacy as they collect their information and allow marketers to bombard them with targeted ads.

As of July 2021, advertisement companies and marketers can reach a total potential audience of 2.252 billion users with ads on Facebook.

Now, Apple changed the game. The company’s decision to change iPhone’s privacy settings impacted social media in an unexpected way.

The advertisement business was shaken by the new rules, causing an estimated $9.85bn loss in revenues. Bold move Apple, bold move.

As mentioned, Apple hit hard and the social media companies have calculated the losses. Snap was the most affected as the update caused brands to pull back on their advertising spending causing over a 25% loss in its shares.

Facebook follows that as its shares went down by 6%, Twitter by 7%, and Alphabet (GOOGL.O) fell 3% on Thursday. The percentage might be small (except Snap), but as big companies, the losses are huge.

The Big Loss – Who’s Affected the Most

Snap expects the update to linger through the fourth quarter, which is practically the highest-earning period of time. That’s when social media platforms ramp up marketing for the holiday season.

Now, to be exact, Snapchat was the worst as a percentage because of its focus on smartphones. However, in this scenario, Facebook lost the most in absolute terms because of its size.

So, with that said, what effect did the iOS privacy update have on each social media platform? Take a look below:

  • Facebook: It’s the most affected it argued that the move will hurt small businesses that rely on such advertising techniques to increase sales. They might have to rebuild their machinery from scratch.
  • Google: This giant won’t be affected much as most searches occur on desktop devices. Also, Google’s promoted results placed on Google searches do not depend on iPhone data.
  • Twitter: The service is spared because it is mainly used for brand advertising. It’s less dependent on data from iPhones or a user’s device.
  • Snapchat: The company said that the Apple provided measurement solution did not scale as it had expected and that it hurt its business drastically.

A lot may agree with Apple’s new update. However, some analysts say that this is a concealed form of hypocrisy. According to Cory Munchbach, chief operating officer at BlueConic: “Apple has done a great job turning privacy into a PR play, but they wouldn’t be doing this if there weren’t money in it.”

Apple Turns the Tides – iOS vs. Advertisement

Tim Cook, Apple chief executive believes that privacy is a basic human right and that there’s no alternative motivation in this update.

Privacy is everything when it comes to the internet. Do you think Apple made the right move? Share your thoughts in the comments below.

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