wall street journalCiting sources, Apple and Meta had intended to collaborate and even launch paid subscriptions to remove advertising interference from Facebook services, thereby allowing both parties to gain greater benefits. However, due to differences in opinion, the collaboration ultimately fell through, and the two sides subsequently fell out over Apple's readjustment of its privacy policy.
Meta discussed launching a Facebook service with paid subscriptions that would remove ads.
Before Apple officially added a new privacy policy to iOS 15.4, it had negotiated potential cooperation with Meta (still known as Facebook at the time). This included adding a version of Facebook that would remove all advertising content through paid subscriptions. Apple would be able to obtain huge profits through in-app payments, while Meta would also be able to obtain actual revenue by attracting a large number of Facebook users to pay for subscriptions. On the other hand, it could continue to obtain advertising exposure benefits through the general version.
In addition, the relevant discussions also include whether Apple can collect commissions from paid content promotion transactions on Facebook and Instagram services. However, Meta believes that this is actually the same as displaying advertising content within the app. Therefore, according to Apple's app usage principles, there is no need to pay Apple a commission on advertising revenue.
However, Apple believes that the promotion of content posted on Facebook and Instagram is actually an in-app transaction, and therefore believes it has the right to collect a revenue share ranging from 30% to XNUMX%.
Ultimately, the two sides did not reach a consensus on this. Sources stated that although the positions of both sides gradually hardened, discussions on the possibility of increasing the benefits of cooperation between the two sides continued between 2016 and 2018.
Apple and Meta restructure their privacy policies, but their stances differ significantly
Apple's iPhone revenue declined around 2016, so it subsequently began to focus on increasing the profitability of its service-type products. As a result, services including iCloud, App Store, and Apple Music have become businesses that Apple actively promotes.
At this time, Meta also began to adjust its privacy, data algorithms, and advertising policies, hoping to increase advertising content revenue. Subsequently, the Cambridge Analytica scandal occurred in 2018, which resulted in the privacy of up to 8700 million Facebook service users being leaked and even involved in influencing the voting direction of the then-US presidential election, triggering investigations by US and European regulators.
As for Apple, it made adjustments to the Safari browser in the summer of 2018, which will restrict website services including Facebook. If it fails to obtain user permission to access privacy information, it will not be able to deliver targeted advertisements by tracking user browsing behavior. Therefore, many businesses that profit from precise exposure of online advertisements will be greatly affected.
Apple subsequently announced at the 2020 WWDC developer conference that it would further adjust its app usage policies, allowing users to decide for themselves whether to allow apps to track and use their private information. It even explicitly stipulated that app content cannot require users to provide personal privacy data on the grounds of whether it can be used normally, which has dealt a greater blow to the profits of companies such as Meta.
Mobile advertising revenue declined significantly
According to statistics from Insider Intelligence, a market research firm, only 37% of iOS users in the United States agree that apps can access their private data. This has led to many apps exposing ads to generate revenue. Because they cannot obtain user private data to deliver more targeted advertising content, the overall profit from ad exposure has declined significantly.
According to statistics from data management company Lotame, after Apple officially launched iOS 2021 in April 4 and officially implemented a new privacy policy, as of now, advertising revenue of services such as Facebook, Twitter, Snapchat and YouTube has lost more than US$15.4 billion. Statistics conducted by mobile market analysis company Tenjin and mobile advertising tool developer Growth FullStack in June this year showed that more than 178% of mobile advertising companies in the United States and the United Kingdom have transferred their advertising budgets from iOS to Android.
After Apple adjusted its privacy policy, Meta, which used to rely heavily on mobile advertising to generate profits, was obviously hit hard. After Apple implemented the new privacy policy, Meta's market value evaporated by about US$6000 billion in less than a year, and in the financial results recently announced to the public, it even showed a decline compared to last year.
In order to prevent the continued impact of Apple's privacy policy, Meta is currently adjusting the operating model of its services, hoping to strike a balance between the existing privacy policy and personalized advertising. However, it is clear that under the restrictions of Apple's privacy policy, it will still face many challenges.
