Apple’s ‘Ask App not to Track’ Helped TikTok's War Against Facebook
Runaway1956 writes:
Apple's recent privacy changes leveled the digital advertising field
In April, 2021, Apple dropped a nuclear bomb on the world of online advertising. The company rolled out a new iPhone privacy setting called App Tracking Transparency, or ATT, that shows you, an iPhone user, a popup asking if you want to "Allow this app to track your activity across other companies' apps and websites?" You have two options: "Ask app not to track" and "Allow." The vast majority of people pick the former, which blocks apps from collecting certain data. Behind the scenes, the change caused a radical shift in the tech landscape. Meta, formerly known as Facebook, said that one setting alone cost the company an estimated $10 billion. Its stock value has plunged 70% this year. But ATT had another side effect, one that got far less attention than Meta's troubles. Apple's iPhone privacy setting gave TikTok a significant leg up in its fight for social media dominance.
"As Meta struggled to maintain performance, TikTok presented a buyer's market for advertisers where demand was low and supply was high," said John Donahue, co-founder of programmatic ad consulting firm Up & to the Right, who's worked with major advertisers like Coca-Cola, Hershey's, and Linksys. "Timing is everything in life, and TikTok couldn't have timed it better."
ATT kneecapped the Facebook ad targeting systems, motivating advertisers to look for new places to spend their money. Even though ATT hurt TikTok in the same ways, the short-form app was in the perfect position to offer an alternative to Meta: its popularity was exploding, its newness meant ad prices were low, and it had designed novel advertising models built for the new privacy world order.
The privacy setting "showcased the risk of having the majority of your eggs in a single basket," Donahue said.
TikTok just lowered its expected ad revenue for the year, but its projected to grow 155%, up $6.01 billion from 2021, according to Insider Intelligence. Meanwhile, Insider predicts that Meta's worldwide ad revenue will drop for the first time ever, down 2% from 2021, a $2.25 billion dip. It would be absurd to give ATT all or even most of the credit for those numbers; the recession played a big role in Meta's losses, as did the company's own long shot bet on virtual reality and "the metaverse." Likewise, Tiktok's gains have a lot to do with cultural shifts. But there's no question that TikTok snatched up advertising dollars that might otherwise have gone to Facebook and Instagram, and Apple's Privacy setting had a lot to do with that.
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