Earlier this year, Apple rolled out an update that gave its user the ability to 'Opt Out' of data tracking that social media platforms use to send targeted advertisements. Now, a Financial Times report has revealed that the power that his update gave to customers has resulted in revenue losses of approximately $10 billion for these platforms.
Along with the update on its operating systems that power the iPhones, iPads, and Apple TVs, the Cupertino-based company released a hypothetical yet very close to reality example of a typical user of apps. Providing details about how many trackers are embedded in apps and how they share this information with other services that the user does not directly interact with, Apple explained that data brokers collect personal information about users and then sell it to the highest bidders to enable targeted ads. With its update, Apple wanted to offer its users better control over their data.
The update offered users a way to opt out of online tracking that was ubiquitous across instant messaging apps, social media, and content delivery services. Exercising this option would lock the app developer from accessing the advertising identifier (IDFA) on the user's device, taking away their access to user's activity as well as identification information such as email address, Apple had said,
An analytics firm had found that just four percent of users in the U.S. had allowed apps to track their data following this update. Facebook was very critical of the update and had also released full-page ads opposing its roll-out, The Verge reported.
The Financial Times report explains the financial reasons for Facebook's apparent outrage. As the leading provider of targeted advertising services, Facebook was set to become the largest loser in this effective policy change. As it turned out, Facebook lost over $8 billion in revenue. Other losers were services like Snapchat, YouTube, and Twitter, taking their total tally close to $9.85 billion as advertisers pulled back from financing campaigns that could not be explicitly targeted. Operating only on smartphones, Snapchat was the biggest loser in terms of impact on total business, the report said further.
Following Apple's move, Google is also expected to roll out a similar update later next year. With over 70 percent of smartphone users on Google's Android OS, a similar move on the platform might sound the death knell for targeted advertisements as we know them today.
Online advertising is expected to go through a sea change to adjust to the changing landscape with advertisers targeting groups of users than individual ones. An alternate option would be to shift to Apple's advertising platform that allegedly broke its own rules when collecting personal data.