The launch of iOS 14.5 was hailed as a reckoning for ad networks. Apple added new privacy features for iPhone and iPad users to decide if they wanted to be tracked for advertising purposes, which has reduced the value of ad platforms which track users.
All four of the major social platforms (Facebook, Google, Snapchat and Twitter) issued warnings after the launch of iOS 14.5.
However, with Q3 results from all four companies reported, there is a difference of opinion as to whether iOS 14.5 is as detrimental as expected.
Snapchat was hit the hardest, with its stock value plummeting 22% after its Q3 reporting. It was also the first to report.
The company said it had not expected as much business disruption from iOS 14.5, and while Snap CEO Evan Spiegel praised Apple’s commitment to user privacy, he also said it had made it more difficult for partners to manage their ad campaigns on iOS.
For Q4, Snapchat also projected lower revenues, due to a mix of iOS 14.5, global supply chain and labour shortages.
Similar issues were brought up in Facebook’s quarterly report. On iOS, COO Sheryl Sandberg said: “we don’t see the same level of conversion data coming through,” and that it would take years for Facebook to rebuild its platform to work with less information.
Despite this, Facebook’s advertising revenue increased 35% from a year earlier, although it is the first time that Facebook’s Q3 revenue has come in lower than its Q2. Facebook managed to weather the storm by posting higher than expected earnings, at $9.2 billion.
Facebook has been the most antagonistic to Apple’s update. It has published full-page ads criticising Apple’s decision as stifling small businesses, however CEO Mark Zuckerberg said in May that the changes may put Facebook in a better position in the future, if businesses are forced to sell directly on the company’s platforms due to poor ad performance.
Twitter was far less concerned about the affects of iOS 14.5, possibly due to Twitter’s smaller client base. It also did not see the same challenges with labour shortages that Facebook and Snap reported, because 50 percent of Twitter’s ad platform being associated with services and digital goods. It generated revenue of $1.28 billion in Q3, a 37 percent year-on-year growth.
Alphabet, the holding company responsible for Google and YouTube, also saw less affect from the iOS 14.5 update, although it is shielded as the owner of the Android platform. Google CFO Ruth Porat did say the update had some affect on YouTube revenues for the quarter, although the company did not state what it planned to do to rectify this.
Google’s advertising brought in $53.1 billion revenue in Q3 2021, with YouTube contributing $7.2 billion towards that.
All in all, it appears that all four platforms are reworking their systems to handle the iOS update, but Q4 may provide us with a better look at the true extent of the update once more iPhones and iPads have updated their software.