Meta is desperate to fight Apple’s privacy changes
Meta (META) is having a difficult year. The company’s stock price is down 57% year-to-date, torpedoing CEO Mark Zuckerberg’s personal wealth to the tune of $72 billion, according to the Bloomberg Billionaire Index.
As the macroeconomic climate hammers the entire tech industry, Meta and other tech companies dependent on ad revenue are facing a unique headwind – Apple’s massive privacy overhaul (AAPL) called App Tracking. Transparency.
The feature, which lets users determine whether they want apps to follow them around the web, is expected to slash Meta’s revenue by $10 billion this year, the company said in February. Now the company is accused of attempting to circumvent the feature and violating federal and state data collection laws in a proposed class action lawsuit in California.
Apple’s privacy changes have taken a toll on Meta’s results, but that’s not the company’s only problem. The growth of TikTok is pushing the social media giant to reinvent Instagram to appeal to Gen Z. The main Facebook app, meanwhile, has completely lost its edge with younger audiences.
These problems have created a swirling vortex of horror from which Meta attempts to escape. And he hopes his bet on the metaverse will be his savior.
How Meta Allegedly Collects Data About The Sites You Visit
Apple’s App Tracking Transparency is a setting that asks if you want to allow an app to track your movements across the web and other apps. Apps and websites do it all the time. I was looking for vintage game consoles on eBay (EBAY), and ads for old Nintendos (NTDOY) and PlayStations (SONY) started popping up on various sites I visited.
The idea is that by tracking users around the web, companies like Meta can create better profiles of consumer groups and use them to help advertisers target their ads more precisely to the people they hope will buy their products. .
However, going untracked cuts off that access for apps, making it harder for advertisers to reach specific customers. Therefore, these advertisers could focus their campaigns elsewhere. Meta isn’t the only company hurt by Apple’s privacy actions. Snap also cited it as a partial reason for some of the company’s struggles with declining ad revenue.
According to the lawsuit, filed on behalf of Facebook users and citing research by Felix Krause, Meta circumvents users’ wish not to be tracked by collecting data about the websites they visit using Facebook’s built-in browsers. its applications.
For example, suppose you clicked a link to go to the Instagram page of a news site and clicked the link in their bio to read an article. Once you select a story to read, it opens in Instagram’s built-in browser. That, according to Krause and the lawsuit, is when Meta injects its own piece of code into sites and is able to collect data about what you watched.
Meta denied any wrongdoing in a statement to Yahoo Finance, saying, “These allegations are without merit and we will vigorously defend ourselves. We’ve carefully designed our in-app browser to respect users’ privacy choices, including how data may be used for ads.
Meta throws everything against the wall
However, Zuckerberg and company aren’t just worried about Apple’s privacy changes. The company also faces its biggest competition in years with the rise of TikTok. Meta has been so obsessed with the challenge TikTok launched that it’s reworking Instagram to look more like the shorthand video app.
The changes haven’t quite won over users. A test version of the app was pilloried by users, including Kim Kardashian, so much so that Instagram chief Adam Mosseri released a public statement saying the company wouldn’t be putting this version of the app. online software. He explained, however, that Instagram will continue its push towards short video.
Meta has many reasons to be concerned about the competition. The company is losing its edge when it comes to its appeal to teens, according to surveys by both Piper Sandler and the Pew Research Center.
It’s not just Instagram that the company is changing. In July, Meta announced major changes to Facebook’s main app, adding Home and Feed tabs. Home is meant to mimic the kind of discovery engine that powers TikTok, giving users a way to find new accounts to follow, while Feeds is where they’ll find messages from friends and family.
Of course, there’s also Meta’s big push into the metaverse, which it unveiled last October with its rebranding. The effort, however, is draining money from the coffers of Meta, and should continue to do so for years to come.
Investors also don’t seem to care about Facebook’s metaverse efforts. Just check the trajectory of its stock price over the past year, and you can see the slump beginning the same day the company announced Apple’s changes were becoming a multi-billion dollar problem.
And, unfortunately for Meta, it doesn’t look like that’s going to change anytime soon.
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