Home Data Privacy Roundup Meta May Rise From The Post-ATT Ashes, But Regulators Still Have It In Their Crosshairs

Meta May Rise From The Post-ATT Ashes, But Regulators Still Have It In Their Crosshairs

SHARE:
Comic: "That's fine."

AdExchanger’s James Hercher covered the heck out of news earlier this week of yet another bug plaguing Meta’s ad platform.

This one involved Meta ignoring cost-capping controls, which caused advertisers to overspend on inventory across Facebook and the Meta Audience Network during the early hours of Sunday morning.

But that wasn’t the only Meta news this week. The company also reported Q1 earnings and beat Wall Street’s estimates, with total revenue for the quarter up 3% to $28.6 billion.

Wait, though, isn’t Meta supposed to still be reeling from Apple’s privacy changes? The nature of addressable advertising on Meta’s platforms was completely upended when Apple released its AppTrackingTransparency framework in 2021.

As Eric Seufert points out at Mobile Dev Memo, behavioral targeting on Meta has been “permanently and systematically degraded by ATT,” not to mention other privacy restrictions via regulations, including GDPR and the EU’s Digital Markets Act.

Yet, Mark Zuckerberg specifically highlighted on the company’s Q1 call that Meta’s ad monetization efficiency was up by more than 30% on Instagram and over 40% on Facebook quarter over quarter.

So, what gives?

Under construction

Meta has been investing like crazy in artificial intelligence, automation tools and privacy-enhancing technologies (PETs).

Machine learning and automation are the beating heart of Meta’s strategy for lapping (to use a term finance people love) the effects of ATT and signal loss more generally.

Meta is pouring money, time and effort into improvements to its ad ranking and measurement, primarily by infusing AI into products like Advantage+.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

Zuck told investors the daily revenue from Advantage+ Shopping campaigns is up by 7x over the past six months.

And Susan Li, Meta’s CFO, said that although Instagram Reels, the short-form TikTok clone (well, she didn’t call it a “TikTok clone,” but we all know that it is), doesn’t monetize as efficiently as others formats, it could be “revenue neutral” by the end of this year.

Meta executives also ballyhooed the company’s popular messaging apps as a moat against signal loss (both current and to come).

Li even referred to messaging as a big part of Meta’s “first-party data playbook.”

Regulators are ready

Good for Meta. But regulatory actions continue to pile up at Meta’s feet.

For example, there’s drama to come on the transatlantic data transfer front.

In mid-2020, the European Union invalidated Privacy Shield, a legal framework for exchanging personal data for commercial purposes between the EU and the US. (When does Max Schrems even sleep, by the way?)

Comic: Schrems IIIShortly thereafter, the Irish Data Protection Commission (DPC) began an inquiry of its own into whether Facebook (these were the pre-Meta days) legally transferred European user data to the US.

The DPC is set to issue a decision on May 12 that will include a suspension order for these transfers and a large fine against Meta.

Regarding the fine … whatever. Meta eats regulatory fines for breakfast and makes millions by lunch. But losing the ability to store European data in the US would be a blow, for sure.

Li told investors that Meta continues “to be hopeful” that a new transatlantic privacy framework will be implemented before the suspension deadline, but can’t “exclude the possibility that it will not be completed in time.”

All of this is to say that although Meta has recovered well since Apple pulled the rug from under its advertising business with ATT, Meta is still fighting a multifront battle against the core of its business model.

For what it’s worth, of the $28.6 billion in revenue Meta generated last quarter, only roughly $500 million of that wasn’t related to advertising. The viability of ads on Meta’s platforms is of existential importance to the company.

Meta may never again achieve the high-flying ROI it had through the ubiquity of its pixels and SDK plug-ins. But it’s back to outperforming everyone else that competes for mobile ad budgets.

Yet Meta may discover that although it’s out of the ATT pan, it’s now in the regulatory fire.

Let me know what you think … of this cat video I recently came across and also of this newsletter (if you are so inclined). Drop me a line at [email protected].

Must Read

Comic: Off-Platform Media

How RMNs Use MFA And Cheap Inventory To Game Attribution Rules

Retail media is built on its attribution quality, but real purchases can be gamed by programmatic metrics and create perverse incentives for RMNs to serve ads across low-quality inventory.

There’s A Lot Wrong With Google’s And Meta’s Non-Transparent ‘Refund’ Practices

Google and Meta are playing with fire. Their opaque refund practices have already exposed them to customer blowback – and could lead to class-action lawsuits by disgruntled advertisers.

Comic: The Great Online Privacy Battle

How US Intelligence Agencies Buy And Use Programmatic Data For Surveillance

Mike Yeagley, an independent contractor who has scouted and acquired commercial data and technology on behalf of intelligence agencies, is one of the earliest evangelists of using ad tech tracking information to identify and surveil government targets.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Comic: The MFA Cafe

Adalytics Report Torches Ad Tech For Touting MFA Prevention While Scarfing MFA Supply

Practically every ad tech vendor has put out a press release in recent months full of bluster about cutting out made for advertising sites – and yet supply sources remain oversaturated with garbage inventory.

Cloud-Based Collaboration Is Ad Tech’s Post-Cookie Lifeline – But Will It Last?

Cross-cloud data collaboration technology is the best bet for a post-cookie solution. But it’s vulnerable to similar privacy concerns.

Topsort Raises $20 Million To Seize The Post-Cookie Market Opportunity This Year

Topsort raised $20 million, with plans to seize the 2024 opportunity for post-cookie ad tech.