Meta Got Rich Running Ads, But Now, Its #1 Revenue Stream Is Threatened

In 2022, Meta Platforms generated over $113 billion in ad revenues, but a recent European Union ruling threatens its number one revenue stream. The January ruling slapped a $414 million fine on Facebook and Instagram, showing GDPR, Europe’s landmark privacy law introduced in 2018, is no joke.

Currently, Meta users opt-in to personalized advertising by agreeing to the company’s terms of service. However, the ruling, responding to two complaints in 2018, says bundling personalized ads with terms of service violates GDPR.

One option for Meta is an Apple-style system that asks users if they want to be tracked. Still, Apple’s 2021 privacy change was a massive blow for companies that rely on user data for advertising revenue. It cost Meta $10 billion in sales.

Recent research by AppsFlyer shows over 56% of Apple users declined to be tracked given a choice. If Meta adopts Apple’s system, its revenues could tank.

The way forward? Some experts propose an opt-in economy where users choose which sites they give their data to. Others suggest tracker-free contextual ads, where an article about summer vacations might feature an Airbnb advert.

How the advertising industry will include personalization within the contextual ad model remains to be seen. Still, with personalized ads being proposed as part of the solution, it could take a while before Meta’s #1 revenue stream suffers irreparable damage.

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