FT: Apple doubled the cost of selling underwear on social media

“All of a sudden you don’t know who is a man and who is a woman.” — Lotame’s Mike Woosley

From “Snap, Facebook, Twitter and YouTube lose nearly $10bn after iPhone privacy changes” posted Monday by the Financial Times:

Apple’s decision to change the privacy settings of iPhones caused an estimated $9.85bn of revenues to evaporate in the second half of this year at Snap, Facebook, Twitter and YouTube, as their advertising businesses were shaken by the new rules.

Apple introduced its App Tracking Transparency policy in April, which forced apps to ask for permission before they tracked the behaviour of users to serve them personalised ads.

Most users have opted out, leaving advertisers in the dark about how to target them. Advertisers have responded by cutting back their spending at Snap, Facebook, Twitter and YouTube and diverted their budgets elsewhere: in particular to Android phone users and to Apple’s own growing ad business…

Mike Woosley, Lotame’s chief operating officer, said advertisers are now getting less bang for their buck on iPhones. He gave as an example a men’s underwear brand that would have gained one customer for a $5 ad targeted at 1,000 men.

“Well, now to get 1,000 men you have to show it to 2,000 people, because all of a sudden you don’t know who is a man and who is a woman,” Woosley said. “And you still only have $5 for those 2,000 impressions. So your acquisition costs doubled and the lost yield is 50 per cent.”

My take: Advertising has always been an odd, unpredictable business. As John Wanamaker famously complained in the late 1800s…

Half the money I spend on advertising is wasted; the trouble is I don’t know which half.

13 Comments

  1. Romeo A Esparrago Jr said:
    It’s under there!

    3
    November 1, 2021
  2. David Emery said:
    I assert Bovine Effluent here. Judging by all the female oriented products (make-up, clothing, shoes, etc) I get pushed in my face on Facebook, a site where they absolutely know my gender, I don’t find this assertion that “loss of gender is significant” all that compelling.

    3
    November 1, 2021
  3. Robert Varipapa said:
    Not much sympathy for billionaire without a conscience Facebook/Meta/whatever you want to call it CEO.

    2
    November 1, 2021
  4. Greg Lippert said:
    People buy gifts for spouses, etc so not necessarily 2x AC

    4
    November 1, 2021
    • Precisely! Plus significant others borrow iPads. Nieces & nephews too. You never know who might see many advertisements. Some businesses pay $1,000s for a billboard ad we must all see every weekday even though the message applies to only a few. Personal injury lawyers ads for example.
      I prefer viral marketing, using actual products around potential buyers. Working for Ma Bell, I had one of the first iPads sold. I often used that iPad in a busy Irish pub in Annapolis. Many people saw it & bought one, including Governor O’Malley. This is an important way new Apple products sell. Still do.

      6
      November 1, 2021
      • David Emery said:
        Well, with that approach, -what value is there in targeting whatsoever?-

        (I think ‘targeted advertising works, particularly for small advertisers’ is just a big lie…)

        0
        November 1, 2021
  5. Gregg Thurman said:
    It seems to me that online advertisers are now on par with direct mail, and judging from the junk mail I get they are almost blind as to who they are marketing to.

    Now if only Apple controlled the Post Office I could save a tree per year.

    1
    November 1, 2021
  6. Mordechai Beizer said:
    My heart bleeds for them (/not)

    Besides, the business model is wrong. Rather than a push model with the advertiser targeting me, it should be a pull model with a smart agent on my device requesting (anonymously) ads targeted to certain demographics/interests.

    20 years ago I tried to start a business doing this, flopped at the time.

    3
    November 1, 2021
  7. Fred Stein said:
    Investors have choices. Most of us do NOT choose to invest in companies that help others interrupt us, spam us, and possibly scam us.

    And despite Do Not Call, plus a supposed call blocking services at $2.99/mo from Verizon, I still get phone scammers. And I use the iPhones call blocking options.

    And there’s junk email.

    1
    November 1, 2021
  8. Jerry Doyle said:
    The worst junk mail is from both political parties. I made the mistake years ago of contributing to candidates from each party who subsequently gave my email to the party’s national party. Now, I get upwards to 30 emails daily from one party and upwards to 20 from the other. That’s 50 emails daily. To whom do I complain? These parties are the ones who do the legislating and they are not about to legislate themselves. So, I now am hounded by the parties of the very elected officials who are suppose to protect me from junk mail.

    4
    November 1, 2021
    • Be thankful you only get political email, Jerry. I share a doctor’s office/house with someone who gives to many causes, political & apolitical. Many candidates, all different states (people now give to candidates in places they’ll never dare visit), most so misinformed I dare not use the paper to line the chicken coops near my hives lest they get ideas too. The chickens, not superintelligent apis mellifera. Plus my boat room is under a doctor’s office. I require a hand truck to get the mail/FedEx/UPS many days.
      My work email is hosted on a secure mail server for my domain I’ve maintained since the early 90s. I use algorithms to channel SPAM, it’s a necessity.

      2
      November 1, 2021
    • Fred Stein said:
      Same here, Jerry. I upvoted.

      Sad to say, the marketing folks from both parties must be the rejects from the marketing industry. That’s harsh, but competent marketers know that if you spam your audience, they’ll use the ‘junk’ feature and block you forever. Sadly, that’s the only response if you don’t want to be spammed.

      0
      November 1, 2021
  9. Rodney Avilla said:
    If I am forced to view ads in order to use an app, then I want impersonal and irrelevant ads, so that they are not distractions of my time. Anytime I am given the choice of selecting items of interest, I always select the least interesting options.

    1
    November 1, 2021

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