Businesses Are Amazed That People Don’t Want to be Targeted with Ads
Small businesses especially, seem to be realizing, finally, that consumers don’t want to be the “product”.
After Apple changed the rules last year to require businesses to get permission to track users’ behavior and share their information, things changed.
The biggies – Facebook, Twitter and YouTube are estimating that they will lose $18 billion in revenue this year due to Apple’s changes. Given that Alphabet alone has $70 billion in revenue per quarter, I don’t think anyone is going to cry about them.
But small businesses are a bigger challenge.
Here is what one small business owner said:
Shelly Cove, an apparel company in North Carolina, laid off its four-person marketing team last month when its cash reserves dried up and it realized spending more money on Facebook ads wouldn’t ramp up sales like it used to.
“In prior years, you could throw money into Facebook—you’d put $1 in, and $2 comes back,” said Matt Schroeder, Shelly Cove founder. “That just doesn’t exist anymore.”
https://arstechnica.com/gadgets/2022/08/small-businesses-count-cost-of-apples-privacy-changes/
Small businesses did not realize, in 2021, with supply chain issues and Covid, that consumers saying don’t track me was having a big impact on their advertising.
Google search and Amazon were not affected by this change since they don’t need apps on an Apple device to track you, so their market share is now going up.
Google is unlikely to follow in Apple’s footsteps since they make 85% of their revenue from ads, including targeted ads.
Here is another business story:
Obvi, an online shop for women’s health, was among the companies that were hit by an abrupt downturn last November when the cost to acquire new customers skyrocketed.
“We were going from one of the best years possible, completely bootstrapped and insanely profitable, and we’re about to hit Black Friday and make a huge splash when everything crashed on us,” said Ashvin Melwani, its chief marketing officer.
Before Apple’s rules came into effect, Obvi would spend an average of $30 to acquire a new customer on Facebook, and the customer would spend about $60. That cost tripled to $90 last autumn, turning a profitable business into a cash-burning one.
Melwani said his marketing budget was around $20,000 a day, with 90 percent going to Facebook. In the past few months, Obvi has cut its budget, shifted spending to TikTok, and reoriented the company toward repeat customers.
https://arstechnica.com/gadgets/2022/08/small-businesses-count-cost-of-apples-privacy-changes/
Bottom line is that tracking consumers’ behavior is still valuable to businesses; they just need to figure out how to adapt to a changing landscape.
How all this works with changing privacy laws is also a consideration.
Probably the most telling piece of the story is that sources say that 96% of iOS users have opted out (more accurately, not opted into) of app tracking. Credit: Ubergizmo
Credit: Ars Technica
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