Apple Did Not Know it Was Helping Tiktok to Beat Facebook!

The phone privacy settings in Apple have given TikTok a significant edge in social media dominance

In April 2021, Apple dropped a nuclear bomb on the world of online advertising. The company has rolled out a new iPhone privacy setting called App Tracking Transparency, or ATT, which shows you, an iPhone user, a popup asking if you want "Allow this app Track your activity across other companies' apps and websites? You have two options: "Ask app not to track" and "Allow". Most people choose the former, which blocks apps from collecting specific data. Behind the scenes, the shift caused a radical shift in the tech landscape. Meta, formerly known as Facebook, said that hiring alone cost the company an estimated US$10 billion. Its stock value has plummeted 70% this year. But ATT had another side effect that drew far less attention than Meta's problems. Apple's iPhone privacy settings have given TikTok a significant edge in the battle for social media dominance.

How has this helped TikTok in the war of Social media dominance against Meta?

According to Gizmodo, "Meta, formerly known as Facebook, said that one setting alone cost the company an estimated US$10 billion. Its stock value has plunged 70% this year. But ATT had another side effect, one that got far less attention than Meta's troubles. Apple's iPhone privacy setting gave TikTok a significant leg up in its fight for social media dominance."

"As Meta struggled to maintain performance, TikTok presented a buyer's market for advertisers where demand was low and supply was high," said John Donahue, co-founder of programmatic ad consulting firm Up & to the Right, who's worked with major advertisers like Coca-Cola, Hershey's, and Linksys. "Timing is everything in life, and TikTok couldn't have timed it better."

Mobile Dev Memom said, "TikTok is a convenient scapegoat for many of the current revenue headwinds confronting social media platforms, but it likely is experiencing those same headwinds. TikTok operates the same "hub-and-spoke" structure of digital advertising that both Meta and Snap utilize, which means Apple's App Tracking Transparency (ATT) policy has created friction for it as well."

App Tracking Transparency is designed to prevent companies from tracking your actions across different apps, websites, and services. Expressly, the setting revokes access to an ID number called Identifier For Advertisers, or IDFA, which Apple created to help ad tech companies track and target you with ads. Suppose you have a gaming app that you want to monetize. They can plug into Facebook's advertising network, collect the IDFA and send it to Facebook so Facebook knows which targeted ads to show you.

But more importantly, the IDFA is used to measure how well ads are performing. Companies like Meta monitor your activity online and how your IDFA shows up across different apps and see if your behavior has changed after seeing a particular ad. This process provides an important metric for advertisers in deciding where and how to spend their money. But ATT disrupted that flow of data, making it much harder to do all that tracking and analysis. The Facebook ad network was built around easy access to this information, and the change caused an earthquake in its systems.

ATT leveled the playing field. TikTok does a lot of targeted advertising, and the privacy setting has hampered the short-form video app as much as Meta. But besides timing, part of TikTok's advantage was that the app developed ad formats that promised to engage users in compelling new ways. tiktokSpark ads' for example, offer commercials that advertisers can use to sneak in marketing that looks the same as the organic content on the platform, which helped TikTok lure advertisers with a path to the 'authenticity' that users crave. TikTok also provided opportunities to collaborate with new and vibrant influencers and leverage the trust content creators have with their audience. At the same time, Meta and other older players struggled on social media to catch up with TikTok and scrambled to retrofit their systems for ATT.