For several years, Facebook and Apple have been at odds; Apple announced at WWDC 2020 that iOS would require apps to ask users to opt-in to cross-app advertising tracking.
Facebook spent much of the following months criticizing Apple’s plans and predicting revenue instability as a result of the upcoming changes, but the feature was released in iOS 14.5 in April of 2021.
Surprisingly, according to a new Wall Street Journal report, Facebook and Apple were working on a partnership and revenue-sharing agreement before this all went down.
The Journal reported that Apple and Facebook were considering a subscription service that would provide an ad-free version of the platform. And, given that Apple takes a cut of all in-app purchases, including subscriptions, it could have been a very profitable arrangement.
Another arrangement that was discussed and became a point of contention was Apple taking a cut of “boosted posts,” which essentially amounts to paying to have a post seen by a larger audience.
Facebook has long considered boosted posts to be part of its advertising portfolio; as the Journal points out, small businesses frequently use boosted posts to reach a larger audience.
The issue boiled down to Apple stating that boosts should be considered in-app purchases, which would be subject to the company’s 30% revenue cut. Facebook, on the other hand, insisted that those were advertising products that were exempt from Apple’s cut.
According to Insider Intelligence, 37 percent of iPhone users have agreed to allow companies to track their activity across apps since the changes were implemented in 2021.
Since the change, Facebook (now Meta) has seen its revenue growth slow significantly, and the company reported its first revenue decline in its history last quarter.
We’re a long way from these discussions, which reportedly took place between 2016 and 2018. Apple is attempting to position itself as a defender of privacy, while Meta is working hard to make the Metaverse a reality.
But, for the time being, advertising is the only significant source of revenue for Meta, so the company will have to continue to adapt to a world in which iOS app tracking protection is something that most users use.