Facebook's privacy apocalypse didn't happen, revenue grew instead - The UpStream

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Facebook's privacy apocalypse didn't happen, revenue grew instead

posted Saturday Jul 31, 2021 by Scott Ertz

Facebook's privacy apocalypse didn't happen, revenue grew instead

Ever since Apple first announced its intention to introduce a new privacy feature in iOS, App Tracking Transparency, Facebook has been in panic mode. The company, along with Google, spent a lot of time and energy trying to convince people that the feature would be bad for everyone. But, as this quarter's financial report shows, the world-ending event never materialized. In fact, things got better for Facebook since the change.

The scenario

Publicly, Facebook tried to convince users that their in-app experience would be harmed because ads would be less relevant and more jarring to their day. The pitch was that, with less targeted ads, they would see more generic ads and things that are not relevant to them. Instead, it would be all generic ads, which can often look scammy and not appealing. To advertisers, they claimed that targeting was going to crash and burn. As such, their ads would be less effective.

The ultimate goal here was to scare both consumers and advertisers into protesting against Apple's decision to implement this feature. Neither Facebook nor Google was able to gather enough support for the concept, as consumers were ALL OVER the new feature. Reports vary in adoption rates, but some numbers put the opt-out rate at nearly 100%, while more conservative rates still show a hefty majority. Advertisers, though concerned, decided not to push too hard for fear of looking like they were anti-consumer privacy. So, the end result was Apple implementing App Tracking Transparency, with many consumers opting to prevent apps from tracking them outside of the app. This was literally Facebook's apocalyptic scenario, which they said would end their business as they knew it.

The result

This week, Facebook released its first earnings report since App Tracking Transparency went into effect, and the results were not as Facebook predicted. In fact, while the company had waged a PR war against the privacy feature, claiming that it would be business-ending, it was a huge quarter for the company. In fact, the earnings increased 56 percent year over year for quarter 2 2021 versus 2020.

Considering that the majority of Facebook's revenue comes from advertising, you would expect a train wreck, based on the marketing. However, the reality was the opposite. Facebook's revenue grew by an almost unprecedented amount. Not only have the results not been as predicted, but Facebook's position on the feature also seems to have changed. While Zuckerberg tried to change the winds a bit, the official position has changed, too. In the report, the company stated,

We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates, which we expect to have a greater impact in the third quarter compared to the second quarter.

For a company known for not being entirely open with its users, this change in attitude, as well as the results being the exact opposite of their publicity, it calls the company's integrity into consideration once again. Was Facebook being legitimate with its doomsday predictions of the future? Were they lying to everyone in an attempt to keep a business-as-usual environment? That question will likely continue to place doubt in consumers' minds going forward.


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