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Saint Paul, MN--Apple's new update to its operating system that allows users to opt out of being tracked is having an outsized impact on smaller businesses. While many consumers applauded the move as a win for user privacy, the update has made it harder for smaller businesses to target their intended demographic accurately.

[Photo by Austin Distel on Unsplash]

According to a report, Taylor Ruotsala started a business called Never Stay Stagnant in 2018, which sells journals for productivity. During the pandemic, the business took off partly because of Facebook's ad platform, which helped her target customers effectively. However, the advent of Apple's new update has made it much more challenging for her to find potential customers, making ad serving expensive.

Moreover, big companies' ad spending went up during the pandemic, pushing the advertising cost higher, and making it hard for smaller businesses to keep up. Per the report, digital ad prices went up anywhere between 20% and 50%, changing the bottom line for many brands whose biggest costs were often digital advertising costs.

While online ad prices have been falling as big marketers have cut back on spending, smaller businesses don't have a choice but to keep spending, regardless of how much ads cost. For instance, Sophie Blake, who owns a jewelry company, needs to advertise to bring in new customers, particularly on social media. That's how she knows there's interest and engagement from her customers.

The update has made it harder for smaller businesses to thrive in a world dominated by big tech and big advertisers. While some changes have benefited consumers, it remains to be seen how smaller businesses will cope with the challenges brought on by these updates.

Learn more about this in the entire report.