Apple released a new version of the iPhone that runs in April 2021. This new version of the software is called iOS 12. During this iOS update, Apple made a few changes to how users could control their data privacy settings and how Apple itself would handle privacy.
Software Update – New Features
App Tracking Transparency was the most important new feature in the software update that was made (ATT). Update: iPhone users will now see a pop-up that says an app wants to track their activities on other apps and the web. This is a significant change. These pop-ups let users decide if they want the app to track them or not.
Those changes were made because Apple thinks “users should be able to choose what data is collected about them and how it’s used.”
Now that this feature has been added, apps and websites can track them across different apps and websites based on the preferences of the users.
Giants’ Revenue Model
The Social Media Giants (SMG) like Facebook (now Meta) have a different way of making money than Apple does, which is why they make so much money. Apple sells phones and laptops and cuts the fees that app developers charge. On the other hand, Social Media Giants sell personalized ads that they can target very specifically because they have a lot of information about their users.
As a result of App tracking tools, the Social Media Giants link the user or device data they collect from their apps with other apps, websites, or offline properties. They then make money through targeted advertising or measuring how well their ads work.
Social media giants also make money by giving data about users or their devices to data brokers. This is how they make money.
Most apps use Identifiers for Advertisers (IDFA), and it uses random identifiers to show personalized ads to users. You might have looked up “shoes” on the internet, and then you start seeing ads for different brands of shoes on other websites. Based on IDFA and the information apps use to track users, ads are being shown.
Social Media Giants’ Revenue Model Impact
Targeted ads are a significant source of money for social media companies like Facebook. App Tracking Transparency has a substantial impact on that. A report by the Financial Times said that 90% of Facebook’s money comes from ads that are targeted at people who are interested in them. The report also noted that 80 percent of iPhone users didn’t want to be tracked by Facebook, Snapchat, and others.
If you don’t have an IDFA, it’s hard to target Apple users. Advertisers who usually use Snapchat, Facebook, Twitter, and YouTube to reach iPhone users have now moved their business to Android and even Apple’s own ad business because they don’t want to be seen by iPhone users.
The social media giants will lose a lot of money because they won’t make money.
Impact on the Market Value of Social Media Giants
Four social media companies have lost some $278 billion in market value since Apple changed privacy on its devices last year, a new report says.
There has been a drop in Meta’s value since April 26, 2021. Snap has lost $50 billion, Twitter has lost $26 billion, and Pinterest has lost $33 billion in value. Snap, Twitter, and Pinterest have lost about half of their value in the stock market. This is a considerable drop.
After Facebook missed its Q4 earnings goals and said that Apple’s changes last year would cost the company some $10 billion in revenue, other social media companies reported their own earnings results, making investors more aware of the weakness. This led to a steep sell-off in their stocks.
Apps often track users’ activity across other apps and the web, but many people don’t know about it because it’s hidden in terms of service or privacy policies. Who reads them?
It’s terrible for people to get targeted ads based on information collected by apps that track them. It misleads people about how their data is collected, how it is used, and how it will be used.
Users now have more control over what information is collected from their devices and about them with the help of a new tool. There is more information about what is being collected, and the users can use their right to choose how their data is used.
Even though it’s too early to say that Apple doesn’t keep track of your activities across apps and websites.