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By Chris Sutcliffe

Facebook owner has found its status as an advertising giant more precarious than it could have imagined. As part of our Data & Privacy Deep Dive, we look at what it is doing to ameliorate effects of Apple’s updates.

When Meta announced its Q2 financial results earlier in the year, it had ready-made excuses to explain away its first-ever revenue drop. Reason number one, a global slowdown in ad spend, had also hit the other tech giants, but the elephant in the room was the impact Apple’s privacy changes had had on the company’s ability to operate – and Meta wasn’t shy about saying so.

The company announced in February that Apple’s AppTrackingTransparency feature would cost it in the region of $10bn in advertising revenue over the course of 2022 alone. At the time, Raj Shah, lead for telecom, media and technology at Publicis Sapient, said: “Five factors contribute to the decline. These are the competition from TikTok, reduced ad spend in a downturn, iOS privacy changes and questions about Meta leadership, both with COO Sheryl Sandberg’s departure and negative PR about corporate policies.”

While the company’s foray into the metaverse (or lack thereof) has been responsible for some of its more recent and more talked-about losses, the Apple tracking changes have in many ways presaged those conversations. Upon opening an app, users were prompted to agree whether to share information; without that permission, the developer is forbidden from accessing the IDFA – the device ID used to target and measure the effectiveness of digital ads.

The changes, which Apple argues are made in service of user privacy, gave a billion iOS users the option to opt-out of being tracked by apps, with an estimated 62% of them choosing to do so.

That tracking tool was how digital advertising giants created user targeting profiles for advertisers and was the basis for how Facebook became one of the largest digital advertising companies in the world. It is small surprise that the changes caused huge consternation among brands that had been used to having access to those targeted tools, or that Facebook’s revenue suffered significantly as a result.

Making the best of it

Prior to publication of its Q2 results, Meta had clawed back a little of the ground lost by the changes. It announced it had narrowed the underreporting estimate from around 15% to around 8% as a result of fine-tuning its measurement and analytics capabilities. That mitigation was welcome news for investors and advertisers, but it also demonstrated that the damage of Apple’s changes would haunt Meta for some time to come.

That was further demonstrated by the changes Meta made to its feeds to prioritize higher-yield ad formats, with a particular focus on short-form video. The company was also accused of trying to circumvent the changes by collecting data from websites users visit using its apps’ built-in browsers, although the company strenuously denies that.

For Meta, the challenge comes from the fact that users are broadly in favor of privacy and Apple has managed to communicate that its changes are in their best interests.

Matt Navarra is a social media and tech analyst. He says: “The impact now, in terms of the relationship with Apple and other tech companies, is converging on this and that makes it a challenging environment [for Meta]. And that is something that Apple has done very well to navigate and still come out looking like the good guy.”

As a result, Meta has attempted to push back against Apple’s changes in a number of ways, from appeals in public-facing media to regulatory efforts. In May, the company announced it was filing a complaint with the US Department of Commerce, stating that: “Despite having some of the most popular apps in the world, Meta’s ability to innovate on its products and services and even reach its customers is determined, and in some cases significantly limited, by the most popular mobile operating systems, such as Apple’s iOS.

“Apple’s self-serving tactics prevent consumers from realizing the innovation and benefits of a dynamic and otherwise well-functioning mobile app ecosystem.”

Sailing into the headwinds

That undercutting of its advertising capabilities continues to impact Meta. While much of the coverage of its Q3 results earlier this month focused on the huge losses accrued by its metaverse division, as well as encroachment from TikTok and the 11,000 jobs lost as a result, the underlying issues remain Apple-related.

Insider Intelligence’s principle analyst Debra Aho Williamson explained: “Meta in 2022 is a far cry from Facebook one year ago. Many aspects of its business are in disarray and its near-term prospects do not look promising. After a dismal earnings report in Q2, we aren’t expecting Q3 to be any better. It’s very possible it will be much worse.

“Many people want to blame TikTok, but it’s not the main reason why Meta is having challenges. Even if some advertisers are moving ad budgets from Meta’s properties to TikTok, it’s likely not a very significant portion of Meta’s overall ad revenue. Instead, Meta’s revenue growth problems stem primarily from the weak economy and from Apple’s privacy changes, which are affecting many digital platforms, not just Meta.“

Notably, during the announcement of the job cuts, Mark Zuckerberg blamed two things. The first was his decision to increase the number of investments the company had made over the past few years, while the second was the changes enforced by Apple.

While the company may have found and be seeking ways to ameliorate the changes, the reality is that Apple’s privacy changes have shaken Meta’s foundations. Its once insurmountable status as an advertising giant has been questioned and while the company isn’t going anywhere for the foreseeable future, it has been proven to be vulnerable.

By Chris Sutcliffe

Sourced from The Drum

The recent story of Meta, née Facebook, has really been two stories. One of them, going back some time now, is about a brand in crisis. 2016 was “the year Facebook became the bad guy.” The next two years were the ones that “shook Facebook.” 2018 brought 15 months of “fresh hell” for the company, before, in 2020, amid some perhaps more salient issues facing the company and the world, Fast Company awarded it “worst brand of the year.” 2021 was “Facebook’s very bad year,” according to The Guardian. “No, really, it might be the worst yet.”

The other story, which didn’t discredit the first one but certainly didn’t agree with it, was basically a line going up and to the right:

This chart ends in September 2021 — a moment when things were still looking good for the company then known as Facebook.

Was Facebook destroying democracy, driving your family and friends insane, racking up thousands of dollars in future therapy bills for your kids, and fracking the discourse until the water isn’t safe to drink? Okay, maybe. But, and, it was also a strong buy — every “worst” year also its best one yet.

These parallel stories started converging right after the crop in this chart, in September of 2021, when Facebook’s stock peaked above $353. The next month — almost exactly a year ago — Facebook molted into Meta, a “Social Technology Company” with a foot in the metaverse.

Over the next year, its stock halved in value and Meta saw its first reported declines in daily users, as well as its first year-over-year decline in revenue.

With its Q3 earnings announcement, Facebook’s two stories became one, with the stock chart corroborating that the company is indeed in crisis. For the second quarter in a row, its revenue declined, and the company projected more pain next quarter. Its operating margin fell from 36 percent to 20 percent year over year, and its net income fell by a shocking 52 percent. “While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” Mr. Zuckerberg said. The stock tumbled in after-hours trading and at Thursday’s open it was below $100 for the first time since 2016 — the first of its Very Bad Years. It is now down about 70 percent from its highs last year shortly before the rebranding.

A broad slump in tech stocks, challenging macro conditions, and even-worse-than-expected fallout from Apple’s restrictive App Tracking Transparency rules share some blame here. Meta has company: Snapchat’s earnings were a disaster, and Alphabet blamed its own bad quarter on “pullbacks in advertiser spends.”

But Meta’s bad quarter, and bad year, also belong squarely to Meta. The company lost more than $9 billion on Reality Labs, which encompasses most of its VR and Metaverse ventures, so far this year. This new line of business — the plan for a post-Facebook Meta — has been losing more money by the quarter as its revenue has decreased. Recent reporting from both the New York Times and Wall Street Journal suggested that the project is internally regarded as a disaster and a distraction. (If you’re still not sure what the metaverse is, or is supposed to become, Meta has happened upon an early use case: It’s a place where you can send billions of dollars to make it disappear.)

Mark Zuckerberg’s story here remains the same: The core business still makes a lot of money, and the metaverse is the next big thing, and we’ll be ready for that, but it’s going to take a while, so please be patient. Which, sure, but we should be as clear as possible about what this means. That core business does continue to make a lot of money, but every possible alarm is going off regarding its future prospects.

Facebook, the main app, is not a healthy platform; within Facebook, it’s understood to be in a sort of managed decline, as users in its most mature and lucrative markets continue to use and enjoy it less; Meta’s big plan for the platform is to replace its guts with a TikTok-style recommendation engine, which, considering the raw material it will be working with, sounds like a rolling family reunion hosted in a chumbox. Instagram is hemorrhaging attention to TikTok, and is midway through an unbecoming transformation into a TikTok clone — a playbook that worked for Facebook, when it copied Twitter for the News Feed, and for Instagram, when it incorporated a version of Snapchat’s Story feature, but which, this time around, seems mostly to be alienating users, creators, and advertisers. Meta, in other words, is profoundly remaking the older services that make the vast majority of its money. It’s taking a serious risk in doing so — materially, tampering with or failing to save these services is much more significant than Meta’s metaverse spending. But it’s also not clear that the company has a better option. It took half a decade for Facebook’s foul vibes to catch up with it, which doesn’t bode especially well for Instagram in 2023.

And while it’s easy to joke about the specifics of Meta’s metaverse work, the promotion of which has included staggering quantities of raw Zuckerberg, this, too, should be understood as riskier, and weirder, than Meta would have us think. Meta became one of the largest companies in the world by selling ads on two of the largest social-media platforms on the internet; it did this with a combination of shrewdness, ruthlessness, and a great deal of good timing and luck. Now, the plan is basically to manifest a whole new more favorable environment in which it’s free to grow without limits again. It’s a blank slate within a blank slate! It’s nothing like anything the company has succeeded with before. It’s ambitious, because it has to be, and we can’t ignore it, because Meta is spending billions to make it happen. But nobody has to pretend it makes much sense, either! Not even Wall Street.

Feature Image Credit: Virtual Zuck has legs, but Meta stock very much does not. Photo: Meta

Sourced from Intelligencer

By Emily Bary

Facebook parent company Meta Platforms was the fifth-most-valuable company in the U.S. near the end of last year, but has since fallen behind Visa, Tesla and others

Dogged by competitive and macroeconomic threats, Meta Platforms Inc. is sinking down the ranks of the largest U.S. companies.

After a 9.4% daily slide in its stock, Meta META, -2.18% ranked 10th by market value as of Tuesday’s close, falling below Visa Inc. V, -1.06% for the first time since the start of August. Meta, the parent company of Facebook and Instagram, ranked fifth among U.S. companies as recently as December, according to Dow Jones Market Data, and joined the four other Big Tech companies — Apple Inc. AAPL, -1.10%, Microsoft Corp. MSFT, -0.26%, Google parent Alphabet Inc. GOOGL, -0.11% GOOG, -0.26% and Amazon.com Inc. AMZN, -2.18% — in the $1 trillion club briefly last year.

Meta’s shares have been punished this year, however, amid concerns about competitive dynamics and the impact of economic uncertainty on advertising revenue. That $1 trillion market cap has been cut by more than half, allowing several companies to jump in front of Meta — which announced its new corporate name last October — on the valuation chart.

Meta’s market value has taken a steep plunge in the past year.

Visa was valued at $413 billion as of Tuesday’s close, compared with $412 billion for Meta. Exxon Mobil Corp. XOM, -1.71% is next on the list with a market capitalization of $397 billion, per Dow Jones Market Data. Standing above Visa are still the four other Big Tech companies in Apple, Microsoft, Alphabet and Amazon, as well as Tesla Inc. TSLA, -0.13%, Berkshire Hathaway Inc. BRK.A, -0.62%, UnitedHealth Group Inc. UNH, -0.36% and Johnson & Johnson JNJ, +1.53%.

Meta’s stock suffered its sharpest daily decline since February in Tuesday’s trading amid broad-market pressure brought on by the latest consumer-price-index reading, which resurfaced fears about the potential effects of inflation on the advertising landscape.

“Meta, like the other social-media companies, has been negatively affected by the moves that Apple did in the advertising business as well as the general anticipation of lower ad spending as we might be going into a recession,” said Nick Mazing, the director of research at Sentieo, who’s been tracking the changes in market values over recent weeks.

Executives at Meta have cautioned about the impact that inflationary pressures and other economic issues could have on the business, with Sheryl Sandberg, then the company’s chief operating officer, telling investors on Meta’s last earnings call that “recessions put pressure on marketers to make sure their ad budgets are spent in the smartest way possible,” though she thought that Meta tools could help them maximize their investments.

Chief Executive Mark Zuckerberg said on that July call that “we seem to have entered an economic downturn that will have a broad impact on the digital advertising business.”

Visa shares have held up better amid the inflationary backdrop, falling just 8% on the year as Meta shares have lost 54%.

While Meta executives have sounded a cautious tone on the current landscape, Visa’s management team has come off more upbeat due to the nature of the payments giant’s business. Back in April, Visa Chief Financial Officer Vasant Prabhu said that inflation had “net-net” been positive for Visa, and as recently as Monday, he said that consumer spending remained resilient.

Visa “is somewhat isolated from the big macro story, the persistent inflation, as they get paid on nominal volumes,” Mazing told MarketWatch, noting that the company has also been benefiting from the big rebound in international travel and the spending that comes with it.

Meta briefly flirted with placement outside the top 10 U.S. most valuable U.S. companies at the start of August, but its dip below Visa this time around keeps it inside the top 10 as fellow technology company Nvidia Corp. NVDA, +2.08% has also seen its value fall sharply in recent weeks.

Nvidia ranked as high as seventh by market cap earlier this year, but it now stands in 15th place with a $327 billion valuation, per Dow Jones Market Data, amid inventory issues that have hit revenue totals and a U.S. crackdown on sales of high-performance artificial-intelligence technology to China.

By Emily Bary

Sourced from MarketWatch

A new team will be tasked with building paid experiences across Meta’s apps

Meta is setting up a product organization to identify and build “possible paid features” for Facebook, Instagram, and WhatsApp, according to an internal memo sent to employees last week that was obtained by The Verge.

The new division is Meta’s first serious foray into building paid features across its main social apps, all three of which boast billions of users. It’s being set up after Meta’s ads business was severely hurt by Apple’s ad tracking changes on iOS and a broader pullback in digital ad spending. The group, called New Monetization Experiences, will be led by Pratiti Raychoudhury, who was previously Meta’s head of research.

In an interview with The Verge, Meta’s VP of monetization overseeing the group, John Hegeman, said the company is still committed to growing its ads business, and that it had no plans to let people pay to turn off ads in its apps. “I think we do see opportunities to build new types of products, features, and experiences that people would be willing to pay for and be excited to pay for,” he said. He declined to elaborate on paid features that are being considered.

Meta’s revenue almost entirely comes from ads, and while it has several paid features already across its apps, the social media giant hasn’t made charging users a priority until now. Hegeman downplayed paid features becoming a meaningful part of the business in the near term, but said that “on the flip side, I think if there are opportunities to both create new value and meaningful revenue lines and also provide some diversification, that’s obviously going to be something that will be appealing.”

Longer term, Meta sees paid features becoming a more meaningful part of its business, he said. “On a five-year time horizon I do think it can really move the needle and make a pretty significant difference.”

Facebook group administrators can already charge for access to exclusive content, and virtual “stars” can be purchased to send to creators. WhatsApp charges certain businesses for the ability to message their customers, and Instagram recently announced that creators could also begin charging a subscription for access to exclusive content. In June, CEO Mark Zuckerberg said the company wouldn’t take a cut of transactions from paid features and subscriptions until 2024.

Meta isn’t alone in pushing toward more paid features. Social media apps have been increasingly turning to charging over the past couple of years. TikTok started testing paid subscriptions for creators earlier this year, Twitter has paid Super Follows, and Discord makes its money entirely from its Nitro subscription. In addition, this year both Telegram and Snapchat added paid tiers that unlock additional features. Snapchat’s paid tier has proven to be an early hit.

“We’re obviously paying attention to what’s going on in the industry,” said Hegeman. “And I think there are multiple companies that have done interesting things in this space that I think hopefully we can learn from and emulate over time.”

Feature Image Credit: Nick Barclay / The Verge

Sourced from The Verge

By Shoshana Wodinsky

Apple’s quietly begun hiring for roles aimed at poaching the Facebook and Instagram advertisers that felt the biggest brunt from the company’s privacy updates

In terms of Silicon Valley feuds, you’d be hard pressed to find one that’s spicier than the years-long battle between Meta and Apple. Meta Platforms CEO Mark Zuckerberg started steering his company toward virtual-reality tech, and now Apple CEO Tim Cook has made it clear he’s gunning for the same. Meta’s Facebook recently started testing out encrypted chats, a domain that Apple has dominated for years.

Facebook is a company that historically hasn’t shied away from sharing user data with countless third parties. Meanwhile Apple AAPL, 0.16%, as its own glitzy ad campaigns constantly remind us, is the one tech company that doesn’t spray your data across the web.

And, of course, there’s Apple’s recent privacy changes to its operating system that wiped out an estimated $10 billion of revenue for Meta META, -0.83%. At the same time, the advertisers that relied on the long-established tools on Facebook and Instagram were left without the data they long relied on for their businesses.

In the year since Apple CEO Tim Cook denounced ad-based business models as a source of real-world violence, Apple has ramped up plans to pop more ads into people’s iPhones and beef up the tech used to target those ads. And now it looks like Apple’s looking to poach the small businesses that have relied almost entirely on Facebook’s ad platform for more than a decade.

MarketWatch found two recent job postings by Apple that suggest the company is looking to build out its burgeoning ad-tech team with folks who specialize in working with small businesses. Specifically, the company says it’s looking for two product managers who are “inspired to make a difference in how digital advertising will work in a privacy-centric world” and who want to “design and build consumer advertising experiences.” An ideal candidate, Apple said, won’t only be savvy in advertising and mobile tech, and advertising on mobile tech, but will also have experience with “performance marketing, local ads or enabling small businesses.”

The listings also state that Apple’s looking for a manager who can “drive multi-year strategy and execution,” which suggests that Apple isn’t just tailing local advertisers but will likely be tailing those advertisers for a while. And considering how some of those small brands are already looking to jump ship from Facebook following Apple’s privacy changes, luring them off the platform might be enough to hamper Meta’s entire business structure for good, ad-tech analysts said.

“If you talk to any small business, they’ll tell you, ‘Yeah, right now is a disaster,” said Eric Seufert, one analyst who’s been following the battle between Apple and Facebook evolve for years. “It’s just a meltdown. There’s been a complete, devastating change to the environment.”

Is Apple’s Tim Cook stealing a page from Facebook’s playbook? Getty Images

‘What goes around comes around’

Zuckerberg has said (over and over again) that Apple’s move to cut off the company’s precious user data would hamper “millions” of small businesses, and, indeed, in the iPhone update’s aftermath, some marketers said they were left “scrambling” to identify whom their ads were reaching — and typically paying sky-high prices for the privilege to do so.

From an iPhone owner’s point of view, it can be tough to understand exactly how a privacy feature could singlehandedly bring countless mom-and-pops to their knees. Especially when that feature, App Tracking Transparency (ATT) — which Apple rolled out in April of last year — does something as upstanding as mandating that app developers give users the freedom to choose whether they want to be tracked across their device.

Most users, by all accounts, would end up saying no. And once they did, those apps lost access to a crucial mechanism in mobile advertising: that person’s unique “identifier for advertisers,” or IDFA for short.

You can think of it as something like the iPhone’s answer to a web cookie. An advertiser can use your IDFA to track, say, whether you saw its ad on Instagram and then bought its product on Etsy ETSY, -0.66%, or followed its account on Pinterest PINS, 3.62%. IDFA was the key that let mobile advertisers know whether their ads actually worked.

So when Apple’s change hit, it wasn’t just Facebook’s advertisers that were flying blind — small shops that were running ads on Google’s GOOG, 0.63% GOOGL, 0.41% YouTube, Snap’s SNAP, 0.84% Snapchat, Pinterest or any other platform where ads are sold experiences some sort of hurt. And the more your platform’s business relied on user data, the bigger sting you felt.

“You can have an ideological take on all of this and say, ‘Well, these ad tools shouldn’t have gotten so efficient, since that was dependent on violating people’s privacy,’ ” Seufert said. “And that’s a fair argument.”

But, as he also pointed out, you can’t ignore economics. Apple certainly hasn’t.

“I guess what goes around comes around,” said Zach Goldner, a forecasting analyst at Insider Intelligence who specializes in digital ads. “I mean, it’s not like Facebook hasn’t copied other platforms before.”

Aside from its myriad privacy scandals, the other core concept that the Meta brand is synonymous with is copying competitors. As Goldner put it, it was only a matter of time before someone tried made a run at the company that’s spent more than a decade weaving its brand into small businesses.

“Using Facebook ads for small businesses is voluntary in the same way that using email for a job search is voluntary,” said Jeromy Sonne, a longtime digital marketer who has since abandoned the platform to start his own ad-serving network.

“No, you’re not ‘locked in,’ and they aren’t forcing you to spend money. There’s no contract here,” he went on. “But because of the lack of options and the number of businesses that built their entire revenue off the back of the platform, it’s virtually impossible to walk away.”

Mark Zuckerberg made Facebook indispensable for the nation’s small businesses. Will that stranglehold endure? Associated Press

How Facebook became ‘virtually impossible’ for small business to escape 

Before rivals like Snapchat and TikTok would hit the social-media sphere, Facebook had been running ads for years.

Some of the last holdouts in the switch to digital were smaller businesses — and reports at the time showed that there wasn’t a lack of companies trying to swoop in on the opportunity to work with local mom-and-pops. Ultimately, a good chunk of them would end up migrating to Facebook; the platform’s ad service was easier and cheaper to run than its competitors, and it offered more data than they did, too.

“You could just run anything in it, and it was so cheap it didn’t matter,” said Sonne. Facebook was offering something that was “100% self-serve” and didn’t have the price floors that other platforms — like, say, DoubleClick — were demanding at the time. And it was far easier to navigate than those competitors to boot.

Then the early aughts happened. In an effort to make its platform more user-friendly in 2014, Facebook started throttling the cheap promotional page posts that brands had become accustomed to, forcing the bulk of them to pay up for ad space in people’s feeds or lose the audience they’d spent nearly a decade cultivating.

When small businesses cried foul, Jonathan Czaja, Facebook’s then–director of small business for North America, said bluntly that the platform was simply “evolving,” and advertisers had no choice but to evolve alongside it.

So they did. A month after Czaja’s statement, the company boasted in a blog post about a new record number of small businesses operating on the platform: 40 million. At the same time, Zuckerberg noted that the company, though it was pivoting to fewer ads in people’s feeds, would be going even harder on microtargeting — a strategy that even he admitted was “pretty controversial” inside the company. Around the same time, employees reportedly began raising red flags about a then-obscure ad firm named Cambridge Analytica, which improperly harvested data from countless Americans in the run-up to the 2016 election.

‘Using Facebook ads for small businesses is voluntary in the same way that using email for a job search is voluntary.’

                                              — Jeromy Sonne, digital marketer

By 2017, the combination of Facebook’s ever-growing cache of user data and increasing scale had left advertisers more or less stuck. When Facebook admitted to marketers no less than a dozen times that it might have flubbed the figures it provided, advertisers shrugged off the miscalculations every time. “Even with the wrong math — it is really small compared to fraud rates on other platforms,” one ad executive told Business Insider at the time. “In digital advertising, you just learn to live with a certain amount of ambiguity.”

Another executive put it more bluntly: “I wouldn’t say they are foolproof, but they are fairly impervious to almost anything.”

Revelations that the company knowingly lied to advertisers for years about how far their campaigns were reaching didn’t send advertisers packing, and neither did the slowly rising prices that many advertisers were paying. It’s typical for ad prices on any platform to fluctuate from month to month, but Facebook’s spikes were unusually extreme. Between January 2017 and January 2018, for example, one analysis found that the prices advertisers were paying for their Facebook ads were spiking as much as 122%.

Meanwhile, finding support as a smaller brand was becoming an increasingly frustrating exercise in futility, Sonne explained.

“Over time the [prices] go up, support gets stretched thin, scaling issues take hold,” he went on. But what was a struggling startup to do? Venture capital had been steadily flowing into a new generation of digital-first brands for more than a decade, which gave them new monthly goals they needed to hit.

“It became a situation where brands or agencies who had expectations of eternal growth could consistently get it from Facebook,” Sonne said, and that their funders now expected the same. But it also made them dependent on a platform that was either increasingly unreliable or downright unusable, depending on which advertiser was asked. Some small businesses reported having their ads improperly flagged by Facebook’s automated ad-review process, while other marketers expressed frustration at how buggy the back-end systems were.

Apple did not respond to a request for comment. A spokesperson for Meta, meanwhile, noted that “small-business owners around the world tell us our products helped them create and grow their businesses.”

“It’s why we are consistently committed to developing and providing new programs, tools, training and personalized advertiser support for them,” the spokesperson went on.

The company doesn’t disclose how many of the 10 million–plus advertisers pouring money into a given Meta property each year qualify as a “small business.” The last time Facebook shared that data itself was in a 2019 earnings call when then–Chief Operating Officer Sheryl Sandberg said the top 100 advertisers represented “less than 20%” of the company’s total ad revenue. An analysis from the marketing analytics firm Pathmatics found that percentage closer to 6%, at $4.2 billion in spending altogether. The company raked in nearly $70 billion in ad revenue that year alone.

Apple’s next move

Since upending the online advertising ecosystem, third-party analysts have seen a surge of advertiser activity — and ad dollars — head Apple’s way.

Last year, for example, one of these reports found that Apple’s Search Ads — which appear at the top of your iPhone screen when you’re looking for a new app to buy in the company’s App Store — were the source of roughly 58% of all iPhone app downloads. A year prior, these same ads were only responsible for 17%. And earlier this summer, one Evercore analyst projected that Apple’s App Store ads could net the company $7.1 billion in revenue by 2025.

“I think the revenue piece [of the ad market] is less important to Apple than just breaking up Facebook’s total ownership of distribution on mobile,” Seufert said. He pointed out that, for a long time, Facebook dominated the market in driving app installs. One report earlier this year found that about three-quarters of those marketing a mobile app rely on Meta’s ad-tech tools to do so.

“Ads are a revenue opportunity, but, more importantly, they’re a discovery mechanic,” Seufert went on. “And suddenly Facebook was determining which apps got downloaded, not Apple. My sense with all this is that they care about the revenue, but I don’t think that was the primary driver. I think it was about the power.”

As far as power plays go, there’s really no better move than homing in on small businesses that have become disgruntled with Meta’s platforms. And as Goldner pointed out, with the economic crush that came with the ongoing pandemic, more advertisers — big and small — are shirking display-based advertising like Meta’s for more search-based advertising like Apple’s.

“As we’re hitting a potential recession, people are moving more towards bottom-of-the-funnel ads to squeeze the margins,” Goldner said. “Whenever a potential economic downturn exists, companies want to focus on maximizing their sales. They care less about goodwill and more about just keeping their businesses afloat.”

Apple’s impending small-business push could also explain the rumblings that the company plans to add search ads to Apple Maps in the near future. After all, one of the best ways your local hardware store or diner can advertise their wares today is via search ads in Google Maps, which have been there since 2016. As Seufert put it, “How could [Apple] justify not doing it?”

Feature Image Credit: Getty Images

By Shoshana Wodinsky

Shoshana Wodinsky is an Enterprise Reporter for MarketWatch.

Sourced from MarketWatch

The message comes as the company seeks to rein in costs during an economic downturn in the long-booming tech industry

Facebook is instructing its engineering managers to identify and weed out their lowest-performing employees as the company seeks to rein in costs during an economic downturn in the long-booming tech industry.

Facebook’s head of engineering, Maher Saba, sent a memo on Friday to managers urging them to identify anyone on their team who “needs support” and report them in an internal human resources system by 5 p.m. Pacific time on Monday.

“If a direct report is coasting or is a low performer, they are not who we need; they are failing this company,” Saba wrote. “As a manager, you cannot allow someone to be net neutral or negative for Meta.”

The memo, which was first reported by the Information, is one of several messages from Facebook executives warning about the need to cut costs as the social media giant seeks to shore up its stagnating digital advertising business and reinvent itself as a virtual reality-powered device maker. Its arrival shocked many employees, who are concerned about potential layoffs, reduced bonuses and fewer promotions.

“The reaction from folks that have seen this is that this will be used to create a bunch [of] ‘performance improvement plans’ that will result in mass layoffs,” a person familiar with the matter said, speaking on the condition of anonymity to describe sensitive conversations.

Meta did not immediately respond to a request for comment.

Facebook, which last year renamed itself Meta, spent years raking in digital advertising dollars as it became the go-to platform for businesses of all sizes to tailor their marketing campaigns to niche audiences. Early on, Facebook and other social media companies benefited from pandemic as more advertisers shifted their marketing dollars online to reach customers spending more time at home.

The company’s stock price has fallen nearly 52 percent since the beginning of the year as it faces threats to its social media business. Apple imposed new privacy rules on app makers on its iPhone devices, which aimed to reduce data collection on its users. Apps such as Facebook were forced to ask users if they wanted their activity tracked across the internet for the purposes of targeted advertising — a request many users rebuffed.

During the final three months of last year, Facebook reported that it lost daily users for the first time in its 18-year history, sending its stock price plummeting. While the social media outlet’s user growth numbers held stable early this year, company executives have warned that it is facing intense competition for users’ attention from social upstarts such as TikTok.

To compete in the crowded market, Facebook is aggressively promoting its short-form video service known as Reels. Facebook chief executive Mark Zuckerberg has argued that the company will be able to monetize the product in the same way it once did for its news feed. Facebook is also trying to stake its future on creating the metaverse — a term used to describe immersive virtual environments that are accessed by virtual and augmented reality.

This month, Zuckerberg told staffers during a companywide call that not everyone was meeting the company’s standards and that some might want to leave voluntarily as the it faces an impending economic downturn, according to media reports. Zuckerberg told staffers they would reduce their plans to hire engineers by at least 30 percent this year, according to Reuters.

“If I had to bet, I’d say that this might be one of the worst downturns that we’ve seen in recent history,” Zuckerberg told workers. “Realistically, there are probably a bunch of people at the company who shouldn’t be here.”

Facebook’s belt-tightening mirrors the cost-cutting happening elsewhere in Silicon Valley. After a decade of exuberance, venture capitalists and established tech companies alike are cutting back on their investments and firing workers. More than 300 start-ups have laid off over 50,023 workers since the start of the year, according to Layoffs.fyi, which tracks cuts in the tech industry.

Feature Image Credit: Susan Walsh/AP

By and Elizabeth Dwoskin

Naomi Nix is a staff writer for The Washington Post, covering Meta and other social media companies. Before joining The Post in 2022, she was a reporter for Bloomberg News and the Chicago Tribune.  Twitter

Lizza joined The Washington Post as Silicon Valley correspondent in 2016, becoming the paper’s eyes and ears in the region. She focuses on social media and the power of the tech industry in a democratic society. Before that, she was the Wall Street Journal’s first full-time beat reporter covering AI and the impact of algorithms on people’s lives.Twitter

Sourced from The Washington Post

There is no law that says you have to use Twitter.

Almost everyone agrees that large swaths of Facebook, Twitter, Instagram, TikTok, and Reddit are terrible, each in their own way. But these monolithic social media platforms are so ubiquitous, it’s easy to forget that you don’t have to use them. Which isn’t to say that you have to swear off of social media forever: There are less odious alternatives that will still let you participate in online life.

These smaller, scrappier social media platforms aim to either correct the most egregious mistakes their big brothers and sisters make, or to provide niche experiences that the larger social media companies can’t/won’t. Below are alternatives to five of the most popular social media platforms. None of them are perfect, but they’re at least different, and probably less terrible. Plus, if any of them really catch on, you can be first to complain about how they used to be so much better.

Ditch Facebook for MeWe: Freedom from advertising and tracking

There are tons of reasons to join the crowds fleeing Facebook—its terrifying targeted advertising policies, rampant misinformation, people use it to plan genocides, your cousin Gary—and only one reason to stay: The sheer number of users. Everyone is on Facebook, and maybe that’s the problem.

My suggested Facebook alternative, MeWe, offers a lot of features that will be familiar to Facebook-users—groups, private chats, tagging, content permissions—and boasts a Facebook-like look and feel, but WeMe is less evil. It’s completely advertising free and doesn’t track or sell its users’ data, staying afloat by offering for-pay premium services. On the downside: There are reportedly 16 million users of WeMe, which might sound like a lot, but it’s a drop in the bucket compared to Facebook’s nearly 3 billion users.

Switch from Twitter to WT.Social: News with less misinformation and hysteria

I’ve had a Twitter account since 2010, but I can’t anymore. I just want links to interesting news stories and the occasional cute cat pic, but Twitter seems intent on serving up maddening, toxic nonsense. The site is awash in hysteria, misinformation, manipulation, and bitterness. If you’re just sick of it like I am, check out WT.Social.

Launched in 2019 by Wikipedia founder Jimmy Wales, WT.social is completely ad-free and dedicated to combating misinformation by allowing users to flag and edit any post, like a certain famous online encyclopedia. There are no advertisers to appease, since the service is paid for through voluntary donations, and WT.social says its mission is to “foster an environment where bad actors are removed because it is right, not because it suddenly affects our bottom-line.”

Switch from Instagram to 500px: Better photos, less psychological trauma

Instagram has long been known to be devastating to the mental health of young people. The photo-sharing platform has been associated with depression, self-esteem issues, social anxiety, and other issues. It’s run by the same people who run Facebook, who seem bent on making social media experiences as addictive as possible. If you’re a photographer and you don’t want to support any of that just to show off your pics, you should switch to 500px.

The platform’s philosophy is built around quality pictures, so you can view and post pics in high resolution. The algorithm that determines which photographs are widely shared is based less on your number of followers and more on “likes” from people who don’t follow you. There are even opportunities to monetize your work.

While 500px is geared toward photographers, if you just like looking at pretty pictures, it might be the service for you too. Unlike Instagram’s mix of pictures, ads, and videos, 500px’s feeds feature only photographs, and it feeds aren’t based on Zuckerberg-style algorithms, so you’ll see only what you want to see.

Switch from TikTok to, well, something

TikTok is the nearly universal choice of young people eager to watch and share shorter videos. TikTok is so huge at the moment, it has no realistic challengers (other than old-school YouTube), and none on the horizon—but that doesn’t mean there aren’t any alternatives. Here are a few video sharing apps that offer things TikTok does not.

  • Triller. This app makes the already easy process of posting videos online even easier. Triller uses AI to edit videos in time to pre-selected music.
  • Clapper. If you’re worried that your important political views are being censored by TikTok, this moderation-light platform will let you spout off whatever dumb nonsense you’d like.
  • Clash. Created by one of the co-founders of Vine, Clash focuses on short form videos, and isn’t designed as a challenger to TikTok as much as a sidecar: It allows creators with existing followings to interact with and monetize their audience in exciting new ways. But that also means users can interact with their faves more easily, too.

Switch from Reddit to Discourse: Less dumbness, more smartness

It’s hard to believe now, but for a couple years after Reddit launched in 2005, it was a discussion forum for smart people. Unfortunately, popularity and an aversion to curation and moderation lead to a dumbing down of content and a proliferation of hateful and boring users. For a smaller, more focused discussion-based community, try Discourse. This open-source forum platform’s stated goal is to “raise the standard of civilized discourse on the internet through seeding it with better discussion software.” In practice, that means trusted, frequent users have a say in how communities are managed; it’s easy to flag bad content; and there exists robust and user-customizable curation. Plus, fewer people use it, so it hasn’t been ruined…yet.

Feature Image Credit: Chernousov family (Shutterstock)

By  Stephen Johnson

Sourced from lifehacker

Meta is rolling out new ways for creators to make money on Facebook and Instagram.

Content is king on social media, and all the platforms are in a sort of gold rush to ensure the supply of new content does not run dry. Every day, it seems, one platform or the other announces some new scheme or incentive for content creators to sign up to.

Not to be left behind, Meta has announced several new ways creators can monetize their content on Instagram and Facebook. Here are the details.

Meta Announces New Ways to Make Money on Instagram and Facebook

All social media platforms have one way or another of making money, and perhaps YouTube offers the most accessible ways to make money.

These monetization options are always being updated. Thus, Mark Zuckerberg has posted several new monetization tools Meta is rolling out for creators on Instagram and Facebook.

In addition, Meta’s blog confirms the company will not charge subscribers a fee on Subscriptions, Badges, Paid Online Events, and Bulletin for an additional year until January 1, 2024.

Clearly, Meta is going all out to attract and hold on to its best creators.

The New Monetization Tools on Instagram and Facebook

Meta has released five new ways for creators to make money on both Instagram and Facebook.

1. Interoperable Subscriptions

Facebook will now allow creators to automatically add their fans on other platforms to subscribers-only Facebook Groups. This allows them to receive payments from their fans on the other platforms, and save time by not having to manually let individual members into their Facebook Groups.

Facebook will launch the service with a limited group of partners before expanding.

2. Facebook Stars

Facebook Stars is now open to all creators. However, they must have at least 1000 followers since the preceding 60 days, be in a country where Stars are available, and meet Meta’s Partner Monetization Policies and Content Monetization Policies. This applies to Facebook Live, videos on-demand, and will soon be available on Facebook Reels.

3. Monetizing Reels

The Reels payment program was previously only available to creators on an invite-only basis. Now Facebook is allowing US-based creators to apply to join. However, they must have created more than five Reels and have a total of 100,000 views in the previous 30 days, and they must meet Meta’s Partner Monetization Policies and Content Monetization Policies to be eligible.

Facebook is also now allowing creators to cross-post Reels on both Instagram and Facebook and earn money on both platforms.

In addition, creators will shortly be able to use the “Paid Partnerships with” label for their branded content on Facebook Reels. This will allow sponsors to convert them to Branded Content Ads.

4. Creator Marketplace

Meta is following in TikTok’s and Snapchat’s footsteps by launching a Creator’s Marketplace on Instagram intended to match creators with suitable brands.

Creators will be able to indicate the brands and topics they’re interested in making branded content for. Brands will be able to find and collaborate with creators through the Meta Business Suite.

“When they’ve found a creator they want to partner with, they’ll be able to send a project that outlines the details of the opportunity, including deliverables and payment offered,” according to Meta.

5. Digital Collectibles

Instagram started allowing NFTs to be shared on its platform in May 2022. Now Meta will allow this feature to be available to more creators in select countries, and soon on Facebook as well (starting with a small group of US creators). Users will be able to cross-post on both Instagram and Facebook.

Instagram Stories will also start hosting NFTs, in partnership with SparkAR.

Creators Have the Upper Hand

In the old days, the content we consumed was determined by a few people at the top of a production company sitting around a boardroom table. These days, social media has shifted the power to independent creators who execute and deliver content directly to us, with no oversight.

The leading social media platforms have taken notice and are scrambling to find ways to lock in the best creators on their platforms in order to lock in our eyes as well. Clearly, it’s a good time to be a creator.

By Patrick Kariuki

Kariuki is a Nairobi based writer. His entire life has been spent trying to string together the perfect sentence. He is still trying. He has published extensively in Kenyan media and, for a hot 7 years or so, dived into the world of Public Relations where he discovered the corporate world is just like high school. He now writes again, focusing mainly on the magical internet. He also dabbles in the vibrant Kenyan start-up scene, AKA the Silicon Savannah, and occasionally advises small businesses and political actors on how to communicate better to their audiences. He runs a YouTube channel called Tipsy Writers, which attempts to get storytellers to tell their untold stories over a beer. When not working, Kariuki enjoys taking long walks, watching classic movies – especially old James Bond movies – and spotting aircraft. In an alternate universe, he would probably be a fighter pilot. More From Patrick Kariuki

Sourced from MUO

Six years after ProPublica revealed that Facebook allowed advertisers to exclude Black users and others, the company agreed to a settlement with the Justice Department to overhaul its ad algorithm system.

In a settlement announced by the Department of Justice on Tuesday, Meta Platforms — formerly known as Facebook — has agreed to eliminate features in its advertising business that allow landlords, employers and credit agencies to discriminate against groups of people protected by federal civil rights laws.

The deal comes nearly six years after ProPublica first revealed that Facebook let housing marketers exclude African Americans and others from seeing some of their advertisements. Federal law prohibits housing, employment and credit discrimination based on race, religion, gender, family status and disability.

For years, ProPublica and other researchers showed that problems persisted in the delivery of advertisements related to housing, employment and credit, even as Facebook pledged to fix the loopholes that we identified.

This week’s settlement was the result of a lawsuit brought three years ago by the Trump administration alleging that Meta’s ad targeting system violated the Fair Housing Act. The DOJ also argued that Facebook used a machine learning algorithm to restrict and create ad audiences, which had the effect of skewing delivery toward or against legally protected groups. This was the first time the federal government challenged algorithmic bias under the Fair Housing Act.

As part of the settlement, Meta has agreed to deploy new advertising methods that will be vetted by a third-party reviewer and overseen by the court.

The company said in a statement that it will implement a “novel use of machine learning technology that will work to ensure the age, gender and estimated race or ethnicity of a housing ad’s overall audience matches the age, gender, and estimated race or ethnicity mix of the population eligible to see that ad.”

The statement, by Roy L. Austin Jr., Meta’s vice president of civil rights and deputy general counsel, noted that although the settlement only requires Facebook to use its new tool for advertisements related to housing, it will also apply to posts about employment and credit. (Facebook declined a request for additional comment.)

Civil rights attorney Peter Romer-Friedman, who has brought several cases against the company, said that previous negotiations had tried and failed to hold Facebook accountable for algorithmic bias. “Ultimately what this shows is that it’s never been a question of feasibility to eliminate algorithmic bias,” he told ProPublica. “It’s a question of will.”

After we reported on the potential for advertising discrimination in 2016, Facebook quickly promised to set up a system to catch and review ads that discriminate illegally. A year later, ProPublica found that it was still possible to exclude groups such as African Americans, mothers of high school kids, people interested in wheelchair ramps and Muslims from seeing advertisements. It was also possible to target ads to people with an interest in anti-Semitism, including options such as “How to burn Jews” and “Hitler did nothing wrong.”

We later found that companies were posting employment ads that women and older workers could not see. In March 2019, Facebook settled a lawsuit brought by civil rights groups by creating a “special ads portal” specifically for employment, housing and credit ads. The company said the portal would curb advertisers’ targeting options and also limit its algorithm from considering gender and race when deciding who should see ads.

But when ProPublica worked with researchers at Northeastern University and Upturn to test Facebook’s new system, we found more examples of biased ad delivery. Though Facebook’s modified algorithm prevented advertisers from explicit discrimination, delivery could still rely on “special ad” or “lookalike” proxy characteristics that correlated with race or gender.

The research also found that Facebook skewed the audience depending on the content of the ad itself. How many women might see a job listing for an open janitorial position, for instance, depended not just on what the advertiser told Facebook, but also on how Facebook interpreted the advertisement’s image and text.

ProPublica also continued to find employment advertisements that favoured men or excluded older possible applicants, potentially violating civil rights law. Some advertisers we interviewed were surprised to learn that they were unable to reach a diverse audience, even if they tried.

In a press release, the DOJ said Tuesday’s settlement requires Meta to stop using the “Special Ad Audience” tool by the end of the year. It also requires Meta to change its algorithm “to address disparities for race, ethnicity and sex between advertisers’ targeted audiences and the group of Facebook users to whom Facebook’s personalization algorithms actually deliver the ads.” The company must share details with the DOJ and an independent reviewer before implementing changes.

As part of the settlement, Meta also agreed to pay a $115,054 fee, the maximum allowed by the law.

“Because of this ground-breaking lawsuit, Meta will — for the first time — change its ad delivery system to address algorithmic discrimination,” U.S. Attorney Damian Williams for the Southern District of New York said in a statement. “But if Meta fails to demonstrate that it has sufficiently changed its delivery system to guard against algorithmic bias, this office will proceed with the litigation.”

Sourced from ProPublica

By Alex Sherman

  • Facebook is openly copying TikTok, and calling it out as a significant competitor.
  • But Blake Chandlee, TikTok’s head of global business solutions, says his company specializes is entertainment, not social media.
  • TikTok hasn’t seen an advertising slowdown despite what other companies are saying, Chandlee said.

 

TikTok is fully aware that Meta CEO Mark Zuckerberg is retooling the Facebook and Instagram apps to be more like its own popular short video service. But TikTok has no interest in mimicking Facebook.

“Facebook is a social platform,” Blake Chandlee, TikTok’s president of global business solutions, told CNBC in an interview on Thursday. “They’ve built all their algorithms based on the social graph. That is their core competency. Ours is not.”

Chandlee, who spent 12 years at Facebook before joining TikTok in 2019, said his former employer will likely run into trouble if it tries to copy TikTok, and will end up offering an inferior experience to users and brands.

Facebook launched Instagram Reels in 2020 as its first real foray into the short-form video market. Last year, it brought the service over to its core Facebook app.

“We are an entertainment platform,” Chandlee said. “The difference is significant. It’s a massive difference.”

Facebook app chief Tom Alison told The Verge this week he sees TikTok increasingly stealing share from the world’s largest social network. Facebook plans to modify its primary feed to look more like TikTok by recommending more content regardless of whether it’s shared by friends.

“I think the thing we probably didn’t fully embrace or see is how social this format could be,” Alison told The Verge.

Facebook’s recent performance backs that up. Meta’s stock price is down 52% this year, underperforming the Nasdaq, which has dropped 32%. In April, the company said revenue in the second quarter could drop from a year earlier for the first time ever.

Earlier in the year, Zuckerberg acknowledged the increased competitive pressure from TikTok and said, “This is why our focus on Reels is so important over the long term.”

TikTok is owned by China’s ByteDance, which is privately held.

Chandlee said history is not on Zuckerberg’s side, and compares its current problem to the challenge that Google faced when it was trying to take on Facebook at its own game.

“You remember when Google was creating Google+,” Chandlee said. At Facebook, “We had war rooms at the time. It was a big deal. Everyone was worried about it,” he said.

But no matter how much money Google poured into its social-networking efforts, it couldn’t compete with Facebook, which had become the default place for people to connect with friends and share photos and updates.

“It became clear Google’s value was search and Facebook was really good at social,” Chandlee said.

“I see the same thing now,” he added. “We’re really good at what we do. We bring out these cultural trends and this unique experience people have on TikTok. They’re just not going to have that on Facebook unless Facebook entirely walks away from its social values, which I just don’t think it will do.”

Facebook didn’t immediately respond to a request for comment.

Chandlee added that he has deep respect for Zuckerberg and views both Facebook and Google as strong competition. However, he noted that TikTok has an array of competitors across the world, including businesses in e-commerce and live streaming.

Chandlee said he hasn’t seen a slowdown in ad spending on TikTok, despite what’s being reported by companies such as Snap, which told investors that ad revenue is being hurt by inflation and the threat of recession. Snap’s stock has lost almost three-quarters of its value this year.

“I’ve heard there’s going to be a slowdown in the ad market, anywhere from 2% to 6%, but we have not seen it,” Chandlee said. “We’re not seeing the headwinds that some others are seeing.”

WATCH: Snap has a TikTok problem, says Lead Edge Capital’s Mitchell Green

Feature Image Credit: Andrew Harrer | Bloomberg | Getty Images

By Alex Sherman

Sourced from CNBC