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Facebook's feud with Apple may dent ad revenue in 2021

‘Stories’ ads on both Facebook and Instagram has been "a notable area of progress" which have become more effective for direct-response advertisers.   | Photo Credit: AFP

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Apple is all set to roll out its anti-tracking feature, an update that gives iPhone users more control over their data. The Cupertino-based company’s update has not gone down well with Facebook as the Apple’s move could ‘‘significantly’’ hurt Facebook’s ad revenue and user targeting strategy in 2021.

The social media giant’s advertising revenue rose 31% in the last quarter of 2020, compared with the same quarter in the previous year. This was driven by the ongoing shift to online commerce during the pandemic, prompting businesses to set up online shops on Facebook's services. Consumer demand also tilted towards products than services, Facebook said in its quarterly results statement.

The social network warned that a moderation or reversal of any of these trends could negatively affect its advertising revenue growth this year.

Also Read | Google to stop using Apple tool to track iPhone users, avoiding new pop-up warning

‘Stories’ ads on both Facebook and Instagram has been "a notable area of progress" which have become more effective for direct-response advertisers, Facebook highlighted.

Last year, Facebook and Apple locked horns over the iPhone maker’s App Tracking Transparency (ATT) feature. Facebook called the feature an abuse of Apple's market dominance to stifle competition.

Changes to the social networking platform, most notably with the iOS 14 update, and a change in the regulatory landscape are likely to negatively affect Facebook's ad targeting practice. "While the timing of the iOS 14 changes remains uncertain, we would expect to see an impact beginning late in the first quarter," Facebook said in the statement.

Also Read | Apple CEO lambasts tech rivals ahead of privacy update

In July last year, the company faced backlash from a consortium of more than 1,000 companies including Unilever, Verizon and Microsoft, that decided to hit pause on advertising on Facebook as the social media platform failed curb hate speech. The boycott did not hurt the company much as the world's second largest seller of online ads earns mostly from small advertisers.

The California-based company's other revenue grew 156% last quarter compared with the previous year, driven by Oculus Quest 2 VR headset sales. The daily active users stood rose 11% from the previous year at 1.84 billion.

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Printable version | Apr 16, 2021 9:55:14 PM | https://www.thehindu.com/sci-tech/technology/facebooks-feud-with-apple-may-dent-ad-revenue/article33748596.ece

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