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APPLE TAKES BITE OUT OF BIG TECH DATA MINING. Losing users isn’t Meta’s (formerly Facebook) only problem.
Changes to privacy protections by Apple implemented in April 2021 are affecting the bottom lines of several big tech firms modeled on profiting off user data.
Apple made a significant update to its privacy policies in April 2021, reducing digital marketers' monitoring powers and allowing iPhone users to opt-out of data sharing. It was evident at the time that this had the potential to dramatically alter digital reality. The value all that personal information holds is now being seen in the damage inflicted to corporate bottom lines.
According to an original report from Markets Insider, many earnings reports from big social media firms, including Facebook, Twitter, and others, indicated a $278-billion impact from Apple's privacy reforms.
Meta Feels the Most Pain
Meta has been one of the affected companies. Meta made news last week for a steep stock price crash. At one point, company shares were down 26 percent, wiping more than two billion off Mark Zuckerberg’s net worth.
That decline came after a poor earnings reports that showed the company lost users for the first time ever, and also failed to meet earnings expectations.
“These changes cause two problems,” according to industry analyst Ruhell Amin, head of retail equity research at William O'Neil + Co. “The first is that the accuracy of Facebook (Meta) ads will decrease, which increases the cost of driving outcomes. And the other is that measuring those outcomes has become more difficult.”
In comments to CNBC, Amin added “Given the fact that Facebook has the most sophisticated ad tech, and the highest monetization rate, there is a belief that perhaps Facebook has the most to lose here. And management did cite incremental headwinds from iOS 15 this year, in the second half of this year.”
In 2022, Apple's privacy upgrade will increase social media fees, tech news outlet Interesting Engineering noted.
Apple already implemented changes informing users when social media apps want to track activity and tailor ads based on that activity.
The iOS update introduced prompts for users to opt-in or opt out of such tracking. Many opted out.
The change was hailed as a major victory for privacy campaigners, who, among other things, objected to social media sites profiting off user engagement sales.
Meta lost around $10 billion in yearly revenue as a result of the missing user data, according to CFO David Wehner, which made it more difficult for the company to offer targeted adverts to the people most inclined to click.
But other factors have impacted Meta’s recent woes.
TikTok was cited as one reason for Meta’s decline in users. A Chinese company with government connections, TikTok is especially popular with a youth demographic. The platform is built on posting and sharing short videos.
Meta spokespeople didn’t explicitly cite the company’s suppression and bans of users and groups expressing dissident political views as another factor in its losses. But recent user base gains by Rumble, GAB, Getter and other platforms more open to free speech are undeniable.
The evolving nature of “Web 3.0,” with a greater emphasis on decentralization and privacy, is something that is revealing the age of not only Meta, but other “2.0” web tech giants like Google, Twitter and even Amazon.
The companies themselves are aware of the changes and have been making moves to get in on—or some say co opt—the incipient blockchain, DLT and crypto driven technology revolution.
It’s why Facebook decided to rebrand and focus on development of the Metaverse. It obviously views metaverse technologies as the future of social interaction, and selling and monetization.
For related articles, see:
- “HOW BIG TECH MAINTAINS ITS MONOPOLY” (17 Aug 2021)
- “HOW BIG TECH MAINTAINS ITS MONOPOLY: A FOLLOW-UP” (24 Aug 2021)
- “CANCELED IN THE METAVERSE” (16 Nov 2021)
- “METAVERSE: THE NEW COLLECTIVE” (14 Dec 2021)
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