Facebook and the Metaverse, page-4

Another key question is will advertising revenue (historically Appen's major source of revenue via Facebook) bounce back?
It's been recently reported that, for the first half of 2021, social media platforms have seen an estimated $10 billion hit in ad revenue. The hit is attributed to the App Tracking Transparency (ATT) feature— Apple's contentious third-party tracking restrictions introduced in iOS 14.5.

"Immediately after the Facebook / Cambridge Analytica scandal broke in 2018, Tim Apple began directing, and campaigning for, aggressive changes to iOS in the name of privacy and mental health. Those changes, it turns out, have disproportionately hurt Facebook. For example, $8 billion of the reportedly $10 billion hit in ad revenue was Facebook's loss. Youtube, Twitter, Snapchat, and others shared the remaining 20%. Those figures don't seem to reflect the companies' respective market shares...''

For companies like Facebook and Apple, the race to the Metaverse has less to do with who will ship the first killer VR/AR application and more who will own the de facto hardware for those applications. It's become clear to Mark Zuckerberg (and perhaps all of us mere mortals in the tech world) that Facebook cannot survive the next decade with Apple as their hardware gatekeepers. As it stands, if you're an American browsing Facebook, Instagram, or WhatsApp from a mobile device, there's a 50% chance that the device runs iOS. This market share puts Facebook in a tight situation, and they can't let that happen again.

Appen is confident that advertising revenue will bounce back, despite what appears to be just about no one on The Street (funds) believing them. Appen maintains that the reason for the lost advertising revenue is "'as a result of our customers prioritising new product developments as they diversify beyond ad-related products in response to regulatory scrutiny and on-going privacy concerns''

https://resources.appen.com/wp-content/uploads/2021/08/Appen-2021-Half-Year-Results-Investor-briefing-transcript.pdf