Facebook And Apple Have Dispute Over Advertising Concerns That Accounts For Major Revenue In The Web Content, Search Portals, SEO Services And Social Media Market

18 Dec, 2020

In June, Apple announced a privacy change that will be put into motion in 2021 – a change that will allow the user to decide if they want to be tracked for personalized ads. Facebook is strongly standing against this, claiming that it would severely harm small businesses that advertise on their platform. This would also directly harm Facebook’s revenue stream from personalized advertising, which adds major value to the company. This is seen in our data, which states that the web content, search portals, SEO services and social media market consists of the revenues generated from sales of advertising, subscriptions and advisory services by entities. The global web content, search portals and social media market is expected to grow from $384.6 billion in 2019 to $424.5 billion in 2020 at a compound annual growth rate (CAGR) of 10.4%. The low growth is mainly due to economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 21% from 2021 and reach $731.8 billion in 2023.

Apple is defending consumer rights to privacy and Facebook is taking a stance as a voice for small businesses that would be affected by this privacy change. The companies that use Facebook as a platform to market their product or service depend on the data tracking for audience targeting, the exact factor that Apple aims to “take away” to protect their users’ fundamental rights. The company only plans to add an option for the customer to decide whether they wish to allow tracking, but Facebook is attempting to contest this announcement by speaking in terms of the impact on small businesses.

As per data on the Global Market Model, many users and non-users of social networks such as Facebook have concerns over the privacy of information they provide to these companies, which is expected to hinder the growth of the web content, search portals, SEO services and social media market in the forecast period. Concerns include IP infringement, censorship, trolling, fake news and inappropriate content, and the difficulties of removing content once posted to sites. Facebook has already been part of a data scandal, where the data of about 87 million people was made accessible to the political consulting and strategic communication firm, Cambridge Analytica, due to factors such as inadequate safeguarding of data against companies engaging in data harvesting and no oversight of developers by Facebook. Such privacy concerns reduce the potential growth of social networking sites, thus reducing revenues in the market.

Apple only wishes to give their users a choice in the matter without demanding that Facebook change anything in their approach of targeted advertising. A large proportion of advertising budgets shifted from newspapers and billboards to the internet. Businesses and product manufacturers use digital advertising to build or maintain a brand image and to market products and services to consumers. Forms of e-advertising include viral marketing, web-based marketing and digital audio advertising. According to the Interactive Advertising Bureau (IAB), in 2017, mobile video ads grew by 65% from 2016 to reach a value of $2.6 billion. The growth in the e-advertising industry provides the key revenue source for the web content, search portals, SEO services and social media market.