Apple reportedly tried to partner with Facebook to get a cut in revenue
Facebook and Apple have been at odds for several years now; Apple announced at WWDC 2020 that iOS would require apps to ask users to sign up for cross-app ad tracking. Facebook spent much of the following months decrying Apple’s plans and predicting revenue instability due to the upcoming changes, but the feature was released in iOS 14.5 in April 2021. Somewhat surprisingly, however, a new report from The Wall Street Journal claims that before this all went down, Facebook and Apple were working on a partnership and revenue-sharing deal.
According to Log, Apple and Facebook were considering a subscription service that would offer an ad-free version of the platform. And since Apple takes a cut of in-app purchases, including subscriptions, it could have been a very lucrative arrangement.
Another arrangement that was discussed and ended up being a point of contention was that Apple was taking a “boosted posts” cut, which is essentially paying to put a post in front of a wider audience. Facebook has long viewed boosted posts as part of its advertising portfolio; as the Log notes, small businesses often use boosted messages to reach more people. The issue came to Apple saying the boosts should be considered in-app purchases, which would be subject to the 30% revenue cut the company takes. Facebook, on the other hand, argued that these were advertising products that are not subject to Apple’s discount.
Since rolling out its user tracking changes in 2021, research firm Insider Intelligence says 37% of iPhone users have opted to let companies track their app activity. Since the change took effect, Facebook (now Meta) has seen revenue growth decline significantly — and last quarter, Meta reported the first drop in revenue in the company’s history.
As these discussions would have taken place between 2016 and 2018, we are far from these talks. Apple is doing its best to position itself as a privacy advocate, and Meta… well, Meta is busy trying to make the Metaverse a thing. But for now at least, advertising is Meta’s only notable way to generate revenue, so the company will have to continue to adapt to a world in which iOS app tracking protection is a thing. which most users take advantage of.