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Meta accuses Google of gaining unfair advantage as advertising business hit by Apple’s new privacy policy

Meta

Meta

According to reports, because the social network application can not collect a large amount of data on iPhone users, Facebook parent company Meta Platforms revenue this year suffered a multi-billion-dollar hit. Over the past year, the company has repeatedly criticized Apple’s privacy practices. Now, it’s taking aim at Google again.

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Google, which also sells targeted ads on the iPhone platform, has an unfair advantage under Apple’s new policy, Meta said. Apps including Facebook must ask users if they agree to be tracked, but Google’s search results and browsers are exempt. This has led some advertisers to transfer their advertising budgets to Google in order to achieve more efficient and precise delivery.

Faced with antitrust scrutiny around the world, Meta has gotten some help by portraying itself as a weakling under threat from greater powers, even naming and criticizing other tech giants.

Meta told investors that the company is expected to lose $10 billion in ad revenue in 2022 due to Apple’s policy changes. This shows that Meta is more affected by Apple’s policy changes than other companies. Facebook has always relied on data from other apps and websites for accurate advertising. Without this data, advertisers would need to spend more budget to achieve the same ad performance.

Doug Zarkin, Pearle Vision’s chief marketing officer, said Facebook ads “are still important, it’s just a lot more expensive.” The company relies on Facebook and Instagram to drive potential consumers to its website and store offering eye care products. He estimates that advertising and marketing campaigns on these platforms are 15% to 30% higher than last year.

Last year Google said it would not alert users about data collection because it had decided not to use any data from iPhones after Apple made adjustments.

Google does not need to use a lot of data from third parties to achieve accurate advertising like Facebook. Google has its own mobile operating system, Android, and its own ad exchange. When users search on the Google search engine, their intent is already revealed. This brings in enough data to allow Google to effectively advertise across platforms in the ecosystem. Such advantages have also prompted marketers to shift advertising budgets from Facebook to Google.

“Google was in the right place at the right time,” said Rick Watson, CEO of RMW Consulting. “Advertiser budgets started to shift because of performance issues, and Google was the biggest recipient of that shift.”

The lack of tracking data also meant that Meta had a hard time proving that its ads led to sales conversions, reducing the value of the ads. Sheryl Sandberg, Meta’s chief operating officer, said this has become a big problem for Meta during the holiday season late last year. The conversion data obtained by Meta is “not granular enough and delayed in time”.

“It makes real-time decision-making more difficult,” she said. “Real-time decision-making is especially important during the holiday season, when advertisers tend to spend huge sums of money tracking their own ads, often adjusting their budgets every hour.”

Apple said the company has a long history of helping users avoid unnecessary tracking. Apple started blocking cross-site tracking in Safari as early as 2017. These privacy protections also cover Safari’s search service, minimizing the amount of data sent to third-party search engines. Safari also offers alternative search services such as Duck Duck Go, the company said.

Apple’s new privacy rules don’t just affect Facebook. According to Branch, a research firm that analyzes mobile app growth and deep linking, users allow an app to track their behavior an average of only 27 percent of the time. Branch’s head of product marketing, Alex Bauer, said those numbers have remained the same over the past few months since Apple made those adjustments last summer.

However, Facebook relies more heavily on this data than other companies, including smaller social media platforms Snap and Pinterest. Both companies have previously reported strong sales results, and the impact of Apple’s new rules on them is not that severe.

Snap said it has pushed advertisers to use Apple’s new tool in the Snapchat app to track ad conversions. Pinterest Chief Financial Officer Todd Morgenfeld said that Apple’s adjustment has not had a material impact on its advertising business so far, but he thinks there will be some impact in the future. “Over time, these issues affect our business. We are not immune to this,” he said.

Meta’s criticism of Apple and Google could draw more scrutiny from regulators, but it’s unclear whether that scrutiny will result in any real changes. In recent years, Apple has been the main target of Meta attacks. Meta criticized Apple’s privacy policies and app store splits, saying these practices hurt small businesses.

Last week, Meta released its fourth-quarter earnings report, and its outlook for the next quarter fell short of Wall Street’s expectations, causing Meta’s market value to shrinking by $251 billion a day after the earnings report. Meta also focused on Google’s strengths. Google announced its fourth-quarter earnings the day before, and advertising revenue exceeded expectations, hardly affected by Apple’s policy adjustments.

“We believe that a service like ours faces a set of constraints from Apple,” Meta CFO Dave Wehner said in the earnings report. In contrast, Google’s search advertising business could benefit more. He suggested that Apple was deliberately targeting Google. Lax, because Google pays Apple to use Google as the iPhone’s default search engine. “Given that Apple continues to collect billions of dollars a year from Google’s search advertising, there is clearly an incentive for this policy difference to persist.”

Some of Google’s mobile ad sales and video platform YouTube were also affected by Apple’s new policy, but Google did not disclose specific losses. On the Android platform, Google’s restrictions on targeted advertising are more relaxed. Google also delayed the ban on advertising cookies in the Chrome browser until 2023.

Eric Seufert, an analyst at marketing trade publication Mobile Dev Memo, said search advertising is Google’s main business, but Apple has “naked” an exemption for that kind of business.

Brian Wieser, president of business intelligence at advertising firm GroupM, said in an email that Apple’s new rules could lead to a shift in advertiser budgets to platforms that have direct access to user shopping data, such as Amazon. Amazon is also currently trying to grow its own advertising business.

Smaller competitors could also benefit, said David Spector, co-founder of lingerie company ThirdLove. “Facebook does get you customers, which is great,” he said. “But at some point, Facebook ads have become too expensive. You’re starting to notice that Snapchat and TikTok ads are also very effective.”

Apple and Meta are also competing more directly in instant messaging products. Apple also plans to develop augmented reality and virtual reality headsets, so there will be more and more conflict between the two companies. Meta’s Quest VR headset has become a central part of the company’s plans for the metaverse.

Meta hopes to develop more advanced technology to achieve precise advertising without collecting too much personal user data. The new system will rely on anonymized, aggregated data, but may require web browsers to cooperate based on a new cryptographic protocol to share data in a secure manner. Meta believes that this strategy will lead to precise ad placement that protects user privacy.

Apple has also benefited directly from the introduction of new privacy protection rules. Ads appearing in App Store searches rose 33 percent, according to marketing analytics firm Singular.

“Almost anywhere in the world, Facebook and Google have built large communities of users around their services,” Singular said in a Tuesday research note. However, “nothing is certain about the future, and past performance is no guarantee of the future. success”.

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