Apple, last year, introduced a new feature in iOS 14.5, which changed the course of how ads are shown in an app. The feature, called App Tracking Transparency, lets users block apps from collecting their usage data. Since an app cannot track the behavior of a user and how they use the app, it becomes difficult for advertisers to target ads.
Ever since Apple rolled out the feature to its users, big tech companies have been saying that App Tracking Transparency is bad for the advertising industry. We saw the effects it had last year, with Snapchat reporting that it lost millions of dollars due to App Tracking Transparency. On the other hand, Facebook reported that it would have to rebuild its ad infrastructure from scratch.
A new report from Lotame has now revealed that App Tracking Transparency could cost big tech companies almost $16 billion in 2022. The report reveals the probable effects of App Tracking Transparency on four major players in this field — Snap, Facebook, Twitter, and YouTube.
Lotame says that Facebook will take the biggest hit of all the companies, with the company losing around $12.8 billion in revenue in 2022. That is followed by YouTube, which could lose up to $2.1 billion as per the report. Despite the loss in revenue, Mike Woosley, Chief Operating Officer at Lotame, says that it is difficult to isolate the effect of App Tracking Transparency alone because all of these platforms are "still growing extremely strongly."
"The effects of these changes on these companies are hard to isolate because all four players are still growing extremely strongly, still taking share from the last bastions of traditional media and gaining share in digital media as privacy regulations make it harder and harder for independent publishers and technologies to execute. To add to the complexity, the pandemic has introduced volatile and unpredictable gyrations in the pacing of media spending."
— Mike Woosley, Chief Operating Officer, Lotame
All in all, the report points out that App Tracking Transparency has caused havoc in the advertising industry. The big tech companies are draining money daily, and it will only continue to increase. And not only big tech companies but a lot of other organizations who use Facebook, Instagram, YouTube, and other channels to promote their products and services have also seen ad prices shoot up. Due to this, the revenue of several startups and businesses has also gone down. Many organizations have reported that it has now become difficult to target their campaigns and connect with users using ads.
Despite this, we believe that App Tracking Transparency is indeed beneficial for the user. It improves the user experience by making sure that advertisers are not tracking your usage and that data remains private to you. Apple says that an average app has six trackers from other companies whose sole purpose is to collect data and track people and their personal info. App Tracking Transparency disables advertisers from collecting this data.
And even though the feature doesn't lower the number of ads shown, it makes sure that the ads you see are not targeted. Apple's current rules only allow advertisers to target their ads at cohorts or groups of people based on certain characteristics. These groups aren’t based on unique device IDs as they're now hidden from the trackers. Moreover, Apple does not allow app developers to offer rewards and offer for enabling app tracking.
How to disable app tracking if you haven't already
If you haven't already disabled app tracking on your iPhone, read along and learn how you can disable all apps from tracking in just a few steps.
- First up, open Settings on your iPhone.
- Scroll down and then select Privacy → Tracking.
- Disable the Allow Apps to Request to Track option.
That's it. You have now blocked all apps on your iPhone from even requesting to track your data. The apps on your iPhone will now not be able to track your usage, and you will begin to see general ads on your device now.