Sci-Tech

Facebook and Snap are likely to suffer badly

Analysts at MKM Partners, quoted by the CNBC media, say Facebook and Snap will suffer the most from Apple’s new tracking capabilities among the applications that benefit from ad revenue.

To arrive at this conclusion, they considered several factors: company size, access to first party data, exposure to iOS devices, relative contribution to sales from installation ads, apps, off-platform ads, small business ads, and ads from companies that are heavily reliant on paid acquisitions from mobile users. Analysts’ results support Bank of America’s predictions that the upcoming changes to the iPhone could result in a 3% drop in revenue on Facebook and 5% on Snap. On the other hand, Twitter and Pinterest are less affected.

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As a reminder, Apple announced its new feature when it announced iOS 14. The Apple brand plans to tighten data security in 2021 and will deploy it shortly. Upon opening an application, iPhone owners can decide whether to accept the latter using their personal information for tracking advertisements, and there is a good chance many opting out will inevitably lead to an upheaval in the industry.

Facebook based its business model on collecting data for ad targeting and has been condemning this new practice for several months. It even blogged and attacked Apple in the press about it. The social network reiterates that small businesses will suffer badly, and also ensures that Apple’s approach is aimed at making a profit, while the latter advocates the security of its users’ personal data.

Companies that have access to first-party data will benefit from this feature, according to analysts, who believe the industry is facing a data security revival anyway and has no choice but to adapt. On the other hand, advertising targeting is logically impaired and can lose quality.

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