How Facebook's Ad Revenue Grew Despite Apple App Tracking Transparency Setback?

Facebook's previously predicted that the App Tracking Transparency feature will heavily affect the company's ad revenue. But despite the feature coming out during the social media giant's Q2 2021, Facebook has managed to post a great ad revenue growth. The revenue increased by 56% YoY in Q2, exceeding the expectation of the investors. The platform witnessed 1.9 billion daily active users and 2.9 billion monthly active users, averaging $10.12 per user.

Could The Results Be Different Next Quarter?

This was the first earnings report Facebook has shared for a quarter that was expected to be hit by Apple's App Tracking Transparency feature. While 56% YoY growth seems like great news, CFO David Wehner has hinted at a greater impact in the next quarter's earnings.

"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," Wehner said.

As per Flurry Analytics data from 2.5 million devices, mostly from the US, only 4 percent of users have allowed apps to continue tracking their activity. Another data from Branch Metrics suggests that less than 33% of iOS users have permitted apps to track them. This has forced advertisers to spend more money to target Android users.

Has Facebook Made Peace With The New Feature?

Before Apple rolled out the App tracking Transparency feature, Facebook started a campaign that showed Apple as the firm trying to shut small businesses. The campaign even saw newspaper ads criticizing the new feature.

"Apple's latest update threatens the personalized ads that millions of small businesses rely on to find and reach customers," read Facebook's site urging small businesses to speak up against Apple's new update.

While the company was against the new feature during its initial messaging, Mark Zuckerberg later started downplaying the impacts of the feature and said the changes could be good for his company and encourage businesses to sell and advertise their products exclusively through Facebook.

What’s Next For Facebook And Apple?

Mark Zuckerberg has envisioned the "metaverse" as the new direction for his company. He aims to put a mixed-reality layer on people's lives, enabling them to virtually interact and socialize with other people. Apple also seems to have a similar long-term vision, but with a different approach.

By introducing the new App Tracking Transparency feature, Apple has pushed Facebook to explore new ad-targeting tactics and has also placed itself in a good position to lock horns in the upcoming mixed-reality computing battle. But for now, Facebook seems intact from Apple's data management strategies. It remains to be seen if the social media giant manages to maintain its revenue in a similar fashion.