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ExchangeWire on WhatsApp, ATT's Impact on Facebook, and the US vs Australia's Media Code

In this week’s episode of the MadTech Podcast, ExchangeWire’s Rachel Smith, Lindsay Rowntree, and Ciaran O’Kane discuss the latest news in ad tech and martech.

 

In this session:

– WhatsApp has extended the deadline for accepting its new terms and conditions. The move follows a mass exodus of users who balked at the company’s demand that they allow their data to be shared with parent-platform Facebook. Millions have since flocked to rival messaging apps Signal and Telegram, sending the stock value of each company skyrocketing.

In response to the boycott and other criticism, Facebook had launched a newspaper campaign in India (where the app also hosts a payment and a food delivery service), telling users that neither the Mark Zuckerberg-helmed firm nor its instant messaging subsidiary has or will have access to their private conversations, which are protected with end-to-end encryption. WhatsApp also attempted to reassure users by stating that the new T&Cs boil down to “giving businesses the option to use secure hosting services from Facebook to manage WhatsApp chats with their customers,” and would not give the company or Facebook direct access to users’ information. Furthermore, despite being presented with the new agreement, the changes are not set to affect users based in the EU, EAA, or UK (even post-Brexit).

These efforts have done little to convince users, however, and WhatsApp has now postponed implementation until the 15th May, 3 months after the original 8th February deadline.

– Sticking with Facebook, the social media behemoth could stand to lose 7% of its revenue from Apple’s implementation of the App Tracking Transparency (ATT) privacy framework on iOS. Whilst the Mark Zuckerberg-helmed firm won’t be the only digital platform to receive a knock to the wallet as a result of the change, Facebook will suffer as ATT limitations “will govern campaign tracking for app-to-web ad campaigns as well as to app-to-app campaigns”, writes Eric Benjamin Seufert

Using a model to quantify Facebook’s potential revenue loss, Seufert predicts that Facebook could see its income dip by 7% in Q2 alone, and continue to fall over successive quarters. Facebook’s ability to personalise targeted ads, which they believe accounts for around half of the Facebook Audience Network’s CPM prices, will also be impeded by the ATT, which will allow users to opt-out of being tracked. This will stifle revenue further by limiting Facebook’s access to user data from outside of their platform, particularly as few users are expected to opt in to being tracked.

– The US has waded into the ongoing Australia vs big tech saga, criticising the Australian government’s proposed News Media Bargaining Code for being “fundamentally unbalanced”. The Code, which was presented to the Australian parliament in December, has long been a thorn in the side for big digital platforms Facebook and Google, who will be forced to pay media organisations in order to re-publish their content if the new legislation is passed.

In a 7-page submission, the Office of the US Trade Representative expressed dismay at the Code’s stipulation that a third-party should arbitrate negotiations between news media organisations and platforms such as Facebook and Google, saying that “the heart of this legislative proposal replaces free market principles with a compulsory code that ultimately allows arbitrators to mandate remuneration.”

The Office also asserts that the Code is flawed due to the lack of “credible, substantive methodology for assigning value” to news content. As such, the US “respectfully request[s] that Australia reconsider whether legislation is needed”, warning that the Code “may result in harmful outcomes”.