According to Facebook, Apple’s iOS features that make it more difficult for platforms and applications to follow users between apps and websites would cost the company $10 billion by 2022.
Facebook announced $33.67 billion in sales yesterday, which was greater than expected, but earnings per share fell short of expert projections. Facebook, renamed Meta, also provided bleak predictions for the first quarter of 2022, estimating sales of $27 to $29 billion, falling shy of $30 billion estimates (via CNBC). Also Apple claims that the App Store bill will result in malware and frauds’ on iPhones
As it has done in the past, Facebook blamed its poor performance in the previous quarter on Apple’s efforts to enhance customer privacy. Most notably, Apple’s App Tracking Transparency (ATT) framework, which requires apps to ask users for permission before tracking them across other apps and websites, is having a negative impact on Facebook’s business, according to Sheryl Sandberg, the company’s chief operating officer, during the earnings call.
First, ads. Like others in our industry, we’ve faced headwinds as a result of Apple’s iOS changes. As we described last quarter, Apple created two challenges for advertisers. One is that the accuracy of our ads targeting decreased, which increased the cost of driving outcomes. The other is that measuring those outcomes became more difficult.
According to Facebook’s chief financial officer, David Wehner, the effects of Apple’s privacy safeguards will pose more serious hurdles to the company’s operations in the coming quarter. “And we anticipate the whole impact of iOS as a headwind on our company in 2022 will be on the order of $10 billion, so it’s a very big negative for our business,” Wehner added.
Wehner then accused Apple of favouring Google in its privacy policies. According to Wehner, ATT exempts browsers from asking users for permission to monitor them across different applications and websites, allowing browsers like Google Chrome to be more successful in tracking users for tailored marketing reasons.
Wehner accused Apple of favouring Google Ad Search because “Apple continues to receive billions of dollars a year from Google Search advertisements, [so] motivation certainly exists for this policy disparity to persist.”
And if you look at it, we believe those restrictions from Apple are designed in a way that carves out browsers from the tracking prompts Apple requires for apps. And so what that means is that search ads could have access to far more third-party data for measurement and optimization purposes than app-based ad platforms like ours.
So when it comes to using data, you can think of it — that it’s not really apples-to apples for us. And as a result, we believe Google’s search ads business could have benefited relative to services like ours that face a different set of restrictions from Apple. And given that Apple continues to take billions of dollars a year from Google Search ads, the incentive clearly exists for this policy discrepancy to continue.
Daily active users (DAUs) were also struck hard in the last quarter, with Facebook reporting a dip in the number of daily people accessing its platform for the first time on record. DAUs were 1.93 billion in the fourth quarter of 2021, down from 1.95 billion the previous quarter. Nonetheless, Wehner stated on the company’s results call that DAUs were up 5% year over year.
We estimate that approximately 2.8 billion people used at least one of our Family of Apps on a daily basis in December, and that approximately 3.6 billion people used at least one on a monthly basis. Facebook daily active users were 1.93 billion, up 5% or 84 million compared to last year. DAUs represented approximately 66% of the 2.91 billion monthly active users in December. MAUs grew by 115 million or 4% compared to last year.
Mark Zuckerberg, Facebook’s CEO, has already changed his mind on Apple’s ATT structure, originally claiming it would harm the firm but subsequently stating it may benefit it in the long run.