New York, USA – One year after Apple has applied changes to its privacy structure, specifically its IDFA change, social media companies such as Facebook, Twitter, Snap and YouTube are seen to take a dramatic hit in revenue, with a foreseen aggregate of $16b in losses. Furthermore, Facebook is predicted to have the biggest blow with 81% of said amount to be incurred by the platform, this is according to an analysis by data solutions provider Lotame.
The identifier for advertisers by Apple or well-known as IDFA is the only means for advertisers to precisely target and track users within apps on iOS devices. It enables an advertiser to get notified when a user of a phone has taken an action like clicking on their ad in a browser and then installing, using, or interacting with ads in their app. By April of 2021, Apple announced changes to its IDFA, dubbing it as an App Tracking Transparency, where users now have the option of not sharing their personal data with third parties.
At that time, Lotame estimated a $9.85b impact on the four companies, with over 80% of that impact on Facebook, which still holds true after a year of the announced changes.
Mike Woosley, chief operating officer at Lotame, said, “The effects of these changes on these companies are hard to isolate because all four players are still growing extremely strongly, still taking share from the last bastions of traditional media and gaining share in digital media as privacy regulations make it harder and harder for independent publishers and technologies to execute.” He also commented, “To add to the complexity, the pandemic has introduced volatile and unpredictable gyrations in the pacing of media spend.”
“As we move into the back half of 2022, we will no longer be talking about the impact the IDFA changes had on these players – by then 18 months hence”, added Woosley. “First, we may be moving into a recession. Next, there are other shocks affecting the industry. Third, we’ll be thinking and talking about the next wave of changes and the likely impact on these players (cookies, IP addresses and GAIDs). Finally, the companies themselves will be telling the market that workarounds and adaptations that they have advanced have cauterized the impact on the business,” said Woosley.