Meta Platforms, Inc. FB shares are down by a whopping one-quarter of their value in reaction to the fourth-quarter results reported by Facebook Wednesday after the close.
The social media platform issued weak guidance, with part of the anticipated weakness attributable to Apple, Inc.'s AAPL iOS privacy changes.
What Happened: Apple's privacy changes will be a $10-billion headwind to Meta's business, CFO Dave Wehner said on the company's earnings call.
The Meta CFO said the impact is seen in a number of verticals, with e-commerce being one of the most impacted verticals from the iOS restrictions.
Wehner also offered an explanation as to why Alphabet, Inc.'s GOOGL GOOG search business is unlikely to be as impacted from the restrictions. The restrictions from Apple, Wehner said, are designed in such a way that carves out browsers from the tracking prompts Apple requires for apps. This means search ads could have access to far more third-party data for measurement and optimization purposes than app-based platforms, he added.
Wehner said he expects this policy discrepancy to continue as Apple continues to take billions of dollars from Google Search ads.
CEO Mark Zuckerberg said in his opening remarks that with Apple's iOS changes and new regulation in Europe, there's a clear trend where less data is available to deliver personalized ads.
Facebook's Plans To Tackle Headwind: Apple, with its privacy changes, has created challenges for advertisers that include decreases in the accuracy of ads and difficulty in measuring outcomes.
Meta is making progress in closing the underreporting gap for iOS web conversions and by introducing tools like aggregated event measurement solutions to deliver better insights for advertisers, said Sheryl Sandberg, the company's chief operating officer.
The social media giant is investing in automation to enable advertisers to leverage machine learning to find the right audience with less effort and reduce reliance on targeting, she added. This, the exec said, will be a long-term effort.
The issues with measurement lead to underreporting gaps and data delays, the executive said. Less granular conversion data is received on a delayed basis, making it tough for advertisers to make real-time decisions, she added.
At last check, Facebook shares were plunging 26.62% to $237.01.
Related Link: Snap Couldn't Snap Out of Apple's Privacy
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