Facebook may lose 7% of revenue due to Apple’s IDFA changes

Eric Seufert, a mobile consultant and editor of Mobile Dev Memo, said Facebook could lose roughly 7% of total revenue in Q2 due to Apple’s upcoming IDFA changes. After some quick math, Seufert said 7% could translate into roughly $5 billion.

Worryingly, a 7% revenue hit in Q2 is only the ‘base-level scenario’ based on Seufert’s modeling. In his best-case scenario, Facebook will take only a 2% ding in the second quarter. In the worst-case scenario, though, the hit could be as high as 13% of revenue or more, he said. This new information comes just months after Facebook took out several full-page newspaper adverts decrying Apple’s privacy changes. Further, the company criticized Apple directly in several statements and blog posts. Facebook said the changes would have a negative effect on developers’ ability to monetize, and that it would be "bad for small businesses.”

Basically, Facebook is saying that if the data connection is severed between Audience Network and Facebook’s central servers, where they have all of their profiles, then there’s no way to match people and CPMs drop by half,” Seufert said.

It’s important to note that Facebook hasn’t yet publicly shared any hard numbers on the possible revenue impact of Apple’s move, which is what makes these numbers from Seufert so interesting. To calculate it, Seufert used four components: the percentage of revenue Facebook gets from mobile, a rough percentage of the revenue it gets from iOS devices, a projection of the opt-in rate for the App Tracking Transparency prompt, and an estimation of how much Facebook’s advertising and targeting efficiency will be impaired without ready access to the IDFA. When the company published their full-page newspaper ads and blog posts about the issue last year, analysts and investors were quick to call it “a seemingly desperate move from Facebook.” It’s now starting to seem like that analogy was indeed correct. With users leaving WhatsApp en masse and the reputation of Facebook at all time lows, investors and analysts are now questioning how Facebook plans to cover up billions in lost revenue.

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