iPhone Tracking Restriction Costs Billions To Tech Firms

The power of Apple and the iPhone ecosystem is great, and so is the tightening of privacy with iOS 14.5 making huge waves. Since their inception, major tech platforms that rely on ad targeting have made billions less from advertising.

iOS 14.5 Impacted Sales In Billions

As of this year, apps on iPhones have always had to ask for permission if they want to use data to deliver targeted advertising. Figures from the weeks after the launch suggest that very few users grant the appropriate permission – in the US, the value is reportedly only 4 percent of iPhone users. This fact leads to a sharp decline in all tech companies that make money with targeted advertising in a very short time.

As the Financial Times writes citing Gizmodo that, the four companies Facebook, Twitter, YouTube, and Snap chat alone lost an average of 12% of their sales in the third and fourth quarters of 2021. The privacy adjustment with iOS 14.5 is therefore directly related to an estimated $9.85 billion in lost revenue in the second half of this year, according to the calculations of the market experts at Lotame.

Estimated figures could be to low

Other experts consider these estimates to be far too low. As advertising expert Eric Seufert explains to the Financial Times, the decline in sales on Facebook alone could amount to 8.3 billion in the first six months of the year. “Some of the most affected platforms – especially Facebook – have to build their machinery from scratch,” said Seufert.

The decline in the large platforms is not accompanied by general cuts in the advertising industry. Rather, marketing companies are shifting their budgets to forms of advertising where the effects can be further traced. The big platforms will now invest a lot in order to get more of this pie again under iOS.