Apple's anti-tracking protections to cost Facebook $10 billion in 2022

Apple Ios Update Privacy Controls
Apple Ios Update Privacy Controls (Image credit: Apple)

What you need to know

  • Latome is out with a new report that looks at the impact of Apple's anti-tracking protections on iOS.
  • Facebook is expected to lose about $10 billion in revenue from advertising in 2022.
  • The top four advertisers are expected to lose about $16 billion.

Apple's anti-tracking protections are costing Facebook billions.

A new report from Lotame took a look at Apple's changes on iOS one year later and found some notable shifts in the advertising businesses of Facebook, YouTube, Snapchat, and Twitter. According to the report, Facebook is expecting to lose about $10 billion from its advertising business in 2022 due to privacy enhancements on iOS.

With respect to Facebook itself, our predictions last fall were also largely borne out. We heard from many advertisers, especially small and independent marketers, that they were forced to reduce or eliminate their spend on Facebook because it simply wasn't effective without the targeting and tracking capabilities inherent in the legacy systems. Facebook validated this on its Q4 earnings call with CFO David Wehner saying "…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. E-commerce was an area where we saw a meaningful slowdown in growth in Q4."

Apps on iOS must now always ask users if they are allowed to track them, whether it be location or across websites. According to the report, about 65% of users on average opt out of tracking.

One key issue to consider in predicting the impact of Apple's App Tracking Transparency (ATT) on large players is how many users block tracking when they download these apps. For our analysis in October 2021, we used 80% across the board. We've seen some data come in and as expected, actual results can be all over the map. A weather app might be much more likely to get permission for tracking than a game. Early on AdAge suggested opt-out rates of about 75%. Months later, industry pubs were suggesting opt-out rates between 54% and 62%. A recent analysis from eMarketer landed at 63%. While estimates do vary widely, there does seem to be substantial consensus, supported by observation, that the opt-out rate has improved (i.e., declined) as 2021 progressed. Today, we think a 65% opt-out rate is a better estimate.

Lotame believes that the impact across all of the major advertisers in 2022 will be somewhere around $16 billion with Facebook eating about 80% of that.

Apple introduced a range of new privacy protections in the last couple of years, including a new opt-in standard over opt-out for app tracking. It has also added new privacy features to iCloud, iCloud Mail, and Safari to block all kinds of tracking.

You can check out everything that the report has to offer on the Lotame website.

Joe Wituschek

Joe Wituschek is a Contributor at iMore. With over ten years in the technology industry, one of them being at Apple, Joe now covers the company for the website. In addition to covering breaking news, Joe also writes editorials and reviews for a range of products. He fell in love with Apple products when he got an iPod nano for Christmas almost twenty years ago. Despite being considered a "heavy" user, he has always preferred the consumer-focused products like the MacBook Air, iPad mini, and iPhone 13 mini. He will fight to the death to keep a mini iPhone in the lineup. In his free time, Joe enjoys video games, movies, photography, running, and basically everything outdoors.