Since Apple introduced App Tracking Transparency, major social networks have made a dramatic U-turn in terms of revenue. Since Facebook, TikTok, Snapchat, and Instagram will have fewer data for ad targeting after the 2020 announcement and 2021 rollout of the user privacy feature, big social is making a concerted effort to shift their focus from advertising to direct user payments.
According to Adam Blacker, vice president of mobile metrics firm Apptopia, “Facebook, Instagram, TikTok, Twitter, and Snapchat are still without paywalls but they all offer products/services for the charge via an in-app purchase (IAP),” from which both Apple and Google take a cut. Since Apple introduced ATT, “quarterly IAP revenue for TikTok, Facebook, Instagram, Snapchat, and Twitter has grown by 91%.”
Until Apple released iOS 14.5 with new privacy features, the major social networks relied heavily on advertising revenue.
More user data allowed for more precise advertising, and more precise advertising led to higher revenue multiples, particularly for Facebook. Ad revenue has dropped as a result of decreased ad relevance due to a lack of available data. Significant social seems to be trying to make up for that revenue loss by charging users for specific services.
Snapchat+ is now available for $40 annually, while Twitter Blue costs $115. As a subscriber, you’ll get early access to new content and other perks across both services. Social media platforms like Facebook and Instagram have made it possible for fans and followers to donate money to their favorite content creators or increase their posts’ reach.
TikTok is more successful than all other social media platforms put together because of its emphasis on creator compensation.
“TikTok’s app revenue has grown for seven consecutive quarters,” Blacker says. So far in 2023, TikTok’s in-app purchase (IAP) revenue is $205 million higher than that of Facebook, Instagram, Snapchat, and Twitter combined.