Apple's Privacy Rule Affects Tech Titans' Revenue by an Estimated $9.85 Billion

Published on 13 Nov 2021

Apple's Privacy Rule Affects Tech Titans' Revenue by an Estimated $9.85 Billion

According to the Financial Times, Facebook, Twitter, YouTube, as well as Snap lost an approximate $9.85 billion in revenue in the first half of 2021 as a result of Apple's new privacy tool, which requires applications to obtain a user's permission before tracking their online activity, the Financial Times  Sunday.

According to the survey, which was backed up by evidence from advertising research company Lotame, businesses lost an average of 12% of revenue over time.

However, other experts believe that assessment is excessive. "It has an excessive influence," Gene Munster, co-founder of Loup Ventures, a private equity company based in Minneapolis, remarked.

This is particularly true in view of marketers' ongoing advancements. "Eventually, measuring tools for the advertising sector will improve, whether or without IDFA," he told TechNewsWorld.

IDFA — Identifier for Advertisers — is Apple's mobile identifier that enables simpler measurement and advertising in mobile applications. Without the user's consent, the new technology cannot be used to monitor them.

Yoram Wurser, a senior consultant at eMarketer Insider Intelligence, a New York City-based e-commerce and retail research organization, was skeptical but did not fully discount the magnitude of the losses. "Nine billion is a generous estimate, but it is doable," he said in a statement. 

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Making a Living Through Targeted Ads

According to Ross Rubin, senior analyst at Reticle Research, a consumer tech consultancy organization based in New York City, YouTube and Facebook are 2 of the highest-grossing profitability sites on the internet, owing in large part to their ability to target their viewers with data.

"A major piece of it comes from recognizing where their users go when they are not on those sites," he said to TechNewsWorld. "As a consequence of Apple's need that consumers opt-in to such surveillance, their advertising pitch about the integrity of their ad data have diminished."

Targeted advertising is especially profitable on smartphones due to the rich nature and volume of user data that can be obtained on such platforms, according to Michela Menting, head of digital security research at ABI Research, a global tech intelligence organization.

The Developers' Impact

According to Menting, Apple's new privacy notice will have an impact on developers, especially those that employ the "freemium" model.

"Privacy regulations may limit their future capacity to connect with advertising," she added. "Overall, what Apple has accomplished is a significant victory for customers and their privacy in general, as well as a significant impediment to social media."

"Those who have extended their business concepts are more likely to succeed," she says. "Those who haven't changed, or who don't adjust quickly, will suffer considerable losses."

Rubin emphasized that businesses are considering a variety of diversification strategies.

"One is premium service upselling," he said. "Another is the variety of subscription services available."

 

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