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Meta Confronts an Apple-Sized Hole in Its Once-Mighty Advertising Business

The social media company must deal with a range of headwinds, but a year later, the hit to its ad targeting capabilities has been particularly painful.

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Illustration: Oscar Bolton Green for Bloomberg Businessweek

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.