When Apple released its App Tracking Transparency feature, social media platforms like Facebook expressed concern over it and said it could affect their ad revenue. It turns out that the concerns these companies might have had were justified because according to a report from the Financial Times (paywall), the feature is said to have cost these companies as much as $10 billion.
This is according to advertising technology company Lotame who spoke with the publication. According to Lotame, they revealed that advertising revenue was down for Facebook, YouTube, Twitter, and Snap by as much as 12% in the third and fourth quarters, which are said to have been worth $9.85 billion.
Lotame’s COO Mike Woosley also suggests that the feature has made ads less effective. He points towards an example of an underwear brand that is usually targeted towards men. Previously, the company would spend $5 for an ad aimed at 1,000 men, but because of the anti-tracking feature that basically obscures the user’s information, companies would need to spend twice as much because they don’t know if the 1,000 people they’re targeting are men.
So they would now need to target 2,000 people in hopes that at least 50% of those people are their target demographic. That being said, it’s interesting that this report suggests how effective the feature is, where earlier this month a study had actually suggested that the anti-tracking tool is a dud.