Fb Feels $10 Billion Sting From Apple’s Privateness Push

“It’s a fairly important headwind,” Mr. Wehner mentioned on a name with analysts.

Apple launched the adjustments final April, altering its iPhone software program to require apps to ask customers whether or not they need to be tracked. The transfer severely restricted the power to collect information by way of apps that’s used to focus on digital adverts and drove advertisers to change spending patterns. Meta had mentioned beforehand that the Apple transfer was hurting its ad enterprise, however hadn’t given an estimate for a way a lot.

Meta “was impacted considerably and it’s going to be a steady drawback,” Daniel Newman, a principal analyst at Futurum Analysis, mentioned Wednesday.

The steerage was a part of a quarterly report that raised a number of considerations for buyers and despatched Meta’s shares plunging greater than 20% in after-hours buying and selling—the equal of a $175 billion-plus loss in market capitalization. Meta additionally reported shedding about 1,000,000 every day customers globally within the final quarter, and its gross sales outlook for the present quarter fell in need of Wall Avenue expectations. The corporate expects bills to leap round $20 billion or extra this yr because it pursues Chief Government

Mark Zuckerberg’s

guess on the metaverse, the net digital world some see as the following evolution of the web.

The gloomy outlook additionally tainted investor sentiment on different ad-focused firms.

Snap Inc.,

which suffered a 20% share decline when it beforehand mentioned it anticipated a income hit from the Apple transfer, declined after Meta’s report on Wednesday. Snap is anticipated to offer extra perception on how its enterprise has been affected when it experiences quarterly outcomes after the bell Thursday. The inventory was down greater than 17% in premarket buying and selling.

Booming digital ad spending has been a boon for Mr. Zuckerberg’s firm. Fb, as the corporate was identified earlier than its renaming final yr to Meta, loved years of sturdy income pushed in important half by its capacity to trace the conduct of customers of apps and web sites and allow advertisers to ship extremely focused adverts based mostly on that data. The Apple coverage change disrupted that capacity, with a big majority of customers, in accordance with some measurements, opting to not be tracked. Meta says that coverage has made ad focusing on harder and measuring the impression of placements tougher.

Apple’s transfer has had attain past social-media firms. Videogame firm

Zynga Inc.,

which focuses on smartphone video games like Phrases With Buddies and has its personal promoting platform, suffered an earnings hit from the brand new Apple coverage that led its shares to drop sharply final yr. The corporate ended up promoting itself to

Take-Two Interactive Software program Inc.

for $11 billion final month.

Whereas there clearly is an impression from Apple’s coverage,

Brian Wieser,

GroupM’s president of enterprise intelligence, mentioned the impression on Meta may not be as nice as the corporate’s executives have urged. “I’m skeptical that it’s as unhealthy as they’re conveying,” he mentioned. The digital ad enterprise stays wholesome, he mentioned, pointing to Google guardian

Alphabet Inc.’s

sturdy earnings this week seemingly largely unaffected by the coverage adjustments.

Twitter,

in its most up-to-date earnings report in October, mentioned it anticipated to be largely unaffected by the Apple coverage as a result of it isn’t as reliant on focused digital adverts as a few of its rivals.

Meta’s CFO, Mr. Wehner, mentioned Apple’s coverage treats Google in a different way, suggesting that the distinction would possibly mirror a longstanding enterprise relationship between the 2 firms. “We consider Google’s search ad enterprise might have benefited relative to companies like ours that face a distinct set of restrictions from Apple and provided that Apple continues to take billions of {dollars} a yr from Google search adverts, the inducement clearly sits for this coverage discrepancy to proceed.”

Google’s flagship search-ad enterprise depends on search phrases clients enter to disclose what they’re curious about, fairly than on information collected from app and internet monitoring.

Apple didn’t instantly reply to a request for remark. Google declined to remark.

Google mentioned its search and promoting income rose 36% and topped $43 billion in probably the most latest quarter, led by energy in retail-related ad spending, with YouTube promoting up 25% from the year-earlier interval. The corporate didn’t deal with the Apple state of affairs however beforehand mentioned the adjustments to consumer monitoring had a modest impression on YouTube income.

Sheryl Sandberg,

Meta’s chief working officer, mentioned on Wednesday’s earnings name that the corporate was engaged on methods to measure the impression of the adverts it sells and to search out methods to indicate related adverts with out accumulating customized information. “That’s going to take us time.”

Write to Meghan Bobrowsky at Meghan.Bobrowsky@wsj.com