A Pain in the ADS!

The Why Part

Apple’s new App Tracking Transparency feature, rolled out in their latest iOS update, asks users whether they would like to be tracked across apps. TBH, in general, people wouldn’t mind much. BUT, if that is put into words and asked to them to their face with a “Ask App not to Track” option, with a CAPITALT“(like the one below), people would most likely opt out. Apparently Yes.

This has sparked huge uproars from the ad industry majors and the industry in general, of which we’ll try to uncover some instances.


Let’s start with this – 98% of Facebook’s revenue comes from ads. That shows how much important it is for Facebook that they could track users to target ads. To make money from ads, they need data on their users so that relevant ads may be targeted at them.

However, according to a Pew research, more than half of those surveyed(in the US) were not comfortable with Facebook compiling their “ad preferences” information.

That makes the case as to how much this will affect Facebook if the users are given an option to opt out. This is apparent from the ad-blitzkrieg they went against Apple in February this year.

Facebook ran full-page newspaper ads in The Wall Street Journal, The New York Times and The Washington Post arguing that Apple’s update will harm small businesses and consumers.

It also posted the following in a blog post: –

Now let me present you with a number that just doesn’t make any sense, given all the above – 3%. According to a Bank of America research, Apple’s App Tracking Transparency feature will decrease Facebook’s revenue by only 3%. This may be attributed to what the CEO told recently in a clubhouse meeting.

It’s possible that we may even be in a stronger position if Apple’s changes encourage more businesses to conduct more commerce on our platforms by making it harder for them to use their data in order to find the customers that would want to use their products outside of our platforms,

Mark Zuckerberg

What he implies is that, companies will more likely flock into Facebook to use its Shop feature to set up e-commerce businesses and won’t choose other platforms as they have data on their users within their app which they can use to recommend products to others users within the app based on their preferences.

So that’s Facebook. Let’s look at some other Foul criers.

Far away in France

It is not just Facebook. In March, France’s startup association, France Digitale, had filed a privacy complaint against Apple with the country’s privacy watchdog, the Commission Nationale de L’informatique et des Libertés (CNIL), on the latest iOS update, accusing the US company of failing to seek permission from iPhone users for its own personalized advertising while it is going to restrict others from doing so.

Apple rejected the allegations at the time as “patently false”, saying that “privacy is built into the ads we sell on our platform with no tracking”.

Eventually, the French anti-trust watchdog eventually dismissed the case.

And Now in Germany

Recently, Germany’s media, internet and advertising industries filed an antitrust complaint against Apple to the German Federal Cartel Office, alleging that the new iPhone privacy settings represent a market abuse and a violation of competition law.

As a result of these one-sided measures, Apple is effectively shutting out all competitors from processing commercially relevant data in its ecosystem,” several business associations said in a joint statement.

According to the lawsuit filed by the lawyers of the business associations, they forecast a 60% drop in ad revenues for mobile app developers.

What does Apple say?

Apple has dismissed all the claims saying that their priority was giving their customers control over their privacy.

A user’s data belongs to them and they should get to decide whether to share their data and with whom,” the firm said in a statement.

These rules apply equally to all developers — including Apple — and we have received strong support from regulators and privacy advocates for this new feature,” the company said.

Closing Comments

With the increasing privacy concerns these days, such a disruption in the digital ad-space was imminent. Last year, Google proposed its plan to ditch cookies(their tracking tool) to implement something called Federated Learning of Cohorts(FLoC), which apparently everyone HATES!

The point being, disruptions are bound to occur. Those who constantly keeps up and innovates stays on top. And, already existing big companies like Facebook, who already have vast troves of user data will come up on top, while small companies will continue to pay the price to the Big-Tech anyway!

Shreesha S
Shreesha S

Shreesha is a Qualified Certified Management Accountant(CMA) and Certified in Strategy and Competitive Analysis(CSCA).

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