Meta predicts iOS privacy changes will cost it $10bn in 2022
Meta has said that privacy changes made by Apple to iOS will end up costing the company $10 billion in 2022.
The parent company for Facebook reported mixed Q4 results on Wednesday, with a lower than expected outlook for the first quarter of the year. Revenue for the quarter came in at $33.67 billion, slightly above the $33.4 billion expected but still below Wall St expectatinos. Shares dropped 23% in extended hours trading after the news, wiping $200 billion off its market value.
Its chief financial officer (CFO) David Wehner said on an earnings call on Wednesday that the social media giant expects its growth to be “negatively impacted” by multiple factors, including supply chain disruptions and cost inflations hitting its advertisers budgets. However, the most significant fear expressed by the CFO was financial “headwinds” resulting from Apple’s iOS changes.
Apple’s iOS 14.5 update, which was released in April last year, included an App Tracking Transparency (ATT) feature which is designed to limit the amount of user data app makers can harvest and sell to advertisers. App developers now need to get explicit permission from users if they want to track their activity across other apps and websites when using iPhones or iPads.
Meta has previously hit out at the decision and, on its earring call, Wehner explained that the company had already seen revenue fall in Q4 as a direct result. He added that this was “in-line” with its expectations, but was going to be a problem for the foreseeable future.
“As we go into 2022, we’re going to be lapping a period in which in Q1 and Q2, those headwinds were not in place in the year-ago period,” Wehner said on the call. “So that definitely makes for a tough comp in the first half of the year. And we believe the impact of iOS overall as a headwind on our business in 2022 is on the order of $10 billion, so it’s a pretty significant headwind for our business. And we’re seeing that impact in a number of verticals.”
Wehner also added that it was “quite notable” that Google’s Q4 results showed positive growth in the same areas. He suggested the company “faces a different set of restrictions from Apple” because of the amount of money Google pays to remain the default search engine on iOS devices.
“We believe those restrictions from Apple are designed in a way to carve out browsers from the tracking Apple requires for app,” Wehner said. “So what that means is that search ads could have access to far more third party data, for measurement and optimisation purposes, than app-based ad platforms like ours.”
“Given that Apple continues to take billions of dollars a year from Google Search, the incentive clearly is for this policy discrepancy to continue.”
Meta also announced continued investment in its Metaverse virtual reality project to the tune of $10 billion.
Ⓒ Future Publishing
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