There are many reasons for the dire situation at Meta Platforms Inc. The company, which has lost two-thirds of its market value this year and cut 11,000 jobs on Nov. 9, has been battered by damaging news about the political and social impact of Facebook, Instagram and WhatsApp. Investors are skeptical of Chief Executive Officer Mark Zuckerberg’s plans to pivot from social networking to the metaverse and worried about rising rivals such as Bytedance Ltd.’s TikTok. And that’s to say nothing of the stresses on the broader economy and the digital advertising market.
But one factor looms above the rest: the changes to Apple Inc.’s privacy policies that have shaken the foundations of the targeted advertising industry. “Meta and lots of other tech companies are hiding underneath this big, gray cloud that’s covering the economy as a whole and sort of using that as a way to hide the reality that Apple is probably doing the most damage and is putting the tightest squeeze on businesses at the moment,” says Max Willens, a senior analyst at Insider Intelligence Inc. Meta’s ability to recover rests largely on finding ways to operate in this new environment.
Zuckerberg’s pitch to advertisers has long been that his company can guarantee that their marketing will reach the right users at Facebook and Instagram. Meta has used the data it collects about its users to help marketers pinpoint those with specific characteristics—for instance, identifying people who resembled their existing customers in key ways—and sell them specific products.
This story is from the November 21 - 28, 2022 (Double Issue) edition of Bloomberg Businessweek US.
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This story is from the November 21 - 28, 2022 (Double Issue) edition of Bloomberg Businessweek US.
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