US Algorithm Bills, Meta Q4 Hit, & More News | Moburst

US Algorithm Bills, Meta Q4 Hit, & More News

Jess Ailion | 28.2.22

Here’s your dose of February monthly news rounded up from the digital marketing and mobile marketing spheres.

New Bill Could Change How Algorithms Push Content

In the US, a new bipartisan bill was introduced to Congress to increase efforts to stop social media algorithms pushing harmful content to users. The bill, titled “Social Media NUDGE Act”, involves the National Science Foundation and the National Academy of Sciences, Engineering and Medicine studying “content neutral” ways of adding friction to online content-sharing. 

Researchers will have to develop numerous methods of slowing down the rate at which harmful content and misinformation is spread on social media, for example requesting users to read an article before sharing it – a method Twitter has adopted. If the bill is passed, the Federal Trade Commission will then codify it so that social media platforms are mandated to incorporate it into their algorithms. 

Meta Took a Q4 Blow

In the early days of February 2022, Meta announced its Q4 earnings, which revealed that its share price dropped over 20% in after-hours trading. In June of last year, Meta’s market cap reached a staggering $1 trillion, but now doesn’t even hit $700 billion. What could be the cause? 

Apple’s App Tracking Transparency policy definitely has a hand at play here. With this new policy, Apple took away reliance on the unique iOS device identifier (IDFA) that digital advertisers depended on for tracking, attribution and more. Meta relied on it heavily for its revenue, since IDFA was one of the main ways advertisers were able to deliver targeted ads on the platform. 

Meta itself attributed its relatively low Q4 earnings to numerous things, including ATT. However, Meta does have a plan to overcome this, as Sheryl Sandberg, Meta’s COO, declared in relation to growing return on ad spend: 

“We’re working on measurement […] to help businesses continue to measure campaigns using Apple’s SKAd Network, API and Meta’s aggregated events measurement and conversion modeling. So we have specific products that people can adopt that help us. Over the longer term, we need to develop privacy-enhancing tech to help minimize the amount of personal information we learn and we use. […] So while we have seen an impact from these changes, we also didn’t start from a place where 100% of our millions and millions of advertisers are using the tools that are available. […] We still believe there’s a lot of performance improvement left in the system.”

Since Meta is having to build an entirely new advertising infrastructure on the back of ATT (and other privacy reforms that have been introduced or on their way), it’s inevitable it will take a toll on its earnings. Especially as this rebuilding is not a quick fixer-upper type job, but a complete renovation from scratch – it will take time.

The Open App Markets Act Affects Apple and Google’s In-App Payments

The Senate Judiciary Committee has voted significantly in favor of the Open App Markets Act, a bill which targets both Apple and Google’s in-app payments. If the bill becomes part of law, all app marketplace owners with more than fifty million US users (a category that both Apple and Google easily fall into) will be forbidden from enforcing third-party developers to use their respective payment systems. Currently, both Google Play Store and the App Store require third-party apps to do this. 

As a result of the legislation, Apple and Google would no longer have the rights to block or penalize developers as a consequence of offering their apps at different prices on other platforms, as developers would be allowed to communicate “legitimate business offers, such as pricing terms and product or service offerings” with their users. Another element of the legislation refers to the installation of third-party app stores, which currently neither company allows and would have to within this law. In addition, Apple would have to begin allowing sideloaded apps on its devices, which Android already does. 

As expected, the bill has not arrived without protest. Both Apple and Google opposed it with claims that it risks user security and privacy. Now, it’s up to the Senate whether the bill is passed.

Why wouldn’t Apple and Google really want this bill passed? They take commission from all in-app purchases made within apps downloaded from their app stores, which amounts to 15% of in-app purchases within developers’ first $1 million of annual revenue. Once developers are turning over more than $1 million revenue, the commission percentage doubles. 

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