During the earnings call yesterday Facebook blamed Apple's new App Tracking Transparency (ATT) feature for not meeting the revenue expectation and that this will cause a negative impact on Facebook's future revenue. Snapchat did the same thing in their earning call five days ago. They also mentioned Apple's new ATT feature as a reason for not meeting the revenue expectations. There is a lot of news here. Let's unpack them in an orderly fashion.
What is App Tracking Transparency (ATT)?
ATT is a new feature. It has to do with user privacy, data collection and use practices by the app makers. Starting with iOS 14.5, iPasOS 14.5, and tvOS 14.5 app developers are required to ask users for permission to track them across apps and websites owned by other companies.
If you use an iPhone or an iPad and are running the latest software, you may have already experienced a pop up menu when you start an app asking for your permission to track your activity across other apps and websites. Most of us would decline for obvious reasons. Why would we want any of them to track our activity?
The fact of the matter is that they have been doing this without us noticing for a long time already. They still do. This feature has exposed them. If you see an app asking for this permission, that means they have been tracking our activity not only on their app but also other apps and websites. To learn more about ATT in detail feel free to visit Apple's developer page on this topic.
Tracking refers to the act of linking user or device data collected from your app with user or device data collected from other companies’ apps, websites, or offline properties for targeted advertising or advertising measurement purposes. Tracking also refers to sharing user or device data with data brokers.
Apple
I don't believe Apple has made this change out of goodness of their heart and that they don't want user activities tracked. I tend to believe they have ulterior motives, like diverting the ad revenue to themselves from third party ad companies and companies like facebook and snapchat. I welcome this new feature. They should have done this a long time ago. But at the same time I wouldn't completely trust Apple either when it comes to user data.
What is the revenue expectation or street expectation?
I had to look this up in Investopedia to confirm what I think it is. It is simply made up by so-called analysts who provide research coverage on various companies. To be more specific, it is an average of forecasts made by these so called market or company analysts. I do not trust them either. There is so much information manipulation going on the wall street, I wouldn't be surprised if they are involved with investment bankers and big money investment firms.
Sophisticated deception tactics?
After earning calls with both of these companies Facebook and Snapchat, both companies had blamed Apple for not meeting expectations and lowering expectations for the future revenues. Various news sites started reporting this, and stocks started going down, etc.
But the funny thing is both of the companies significantly increased their revenue compared to the previous ones. Span's revenue improved by 57% to $1.07 billion. This is the first time they had a billion dollar revenue quarter. But since the street expectation was $2+ billion, this is a bad thing? Doesn't make sense.
If we look at Facebook's revenue and compare with the previous quarter, things look great for Facebook. They have been making more and more. In fact, this Q3-21 they made the most at $29 billion.
I would like to highlight two kinds of manipulations I think are happening here. First, both companies at the cost of exposing themselves that they have been tracking their user activities everywhere and that's how they make a lot of money, they felt a need to do this in order to lower the expectations for the next quarters. Because in the end it is all about money for them. It is all about making their stock prices go up. When expectations are low and they beat them, news manipulation brings stock prices higher. They all make money.
Second manipulation is by these so called experts, investment bankers/traders, and newsmakers. I think all three share the same playbook and operate with the same goal - to manipulate the news and the markets. Regardless if the news is good or bad they can still make money, as long as they control the narrative. While I am just mentioning a couple of these companies, there are many more who do the same thing, follow the same methodology to enrich themselves and their shareholders.
The problem with all of these companies and parties involved is that they utilize deception and manipulation in achieving their money making, market grabbing strategies and goals. It is not about the free market anymore. It is about how to control the market, how to control the people, and monetize anything and everything they can.
Decentralization is the way!
For this reason decentralized solutions like Bitcoin and Hive are important to emerge as strong alternatives. Because these innovations bring the power and ownership back to the people, provide transparency, create fair free market networks.
Big tech networks are too powerful though. Despite the fact that now iPhone users have an ability to opt out of their activities being tracked, they still made record revenues. Despite these companies publicly exposing themselves that the way they make money is through advertising using data on their users, their activities, browsing history, purchasing habits, it is highly unlikely to cause mass exodus from these platforms. They still have tools in their pocket they can utilize to keep users around and keep onboarding more.
Just consider this. Out of Facebook's $29 billion total revenue, advertising revenue was $28.28 billion. 97% of their total revenue is from ads. And how much of that do they give back to their users?
To quote Douglas Rushkoff, technology and media expert about traditional social media - "Digital networks are just the latest media to go from promoting social bonds to destroying them - from fostering humanity to supplanting it". Shifting from centralized social media that focuses on neatly packaging 'eyeballs' and 'clicks' as a form of business model to decentralized standards that ordinary people derive value and participate in economic models that benefit them may just be the future.