Speaker 1
But second of all, I mean, you can look at what ATT does and it severs those two sort of endpoints from being able to transmit data between each other by removing the idea of a and then also layering all this policy on top of that to prevent other identifiers from being used. So if we all agree that that ATT does that. Absolutely.
Speaker 1
So then I think we're all in agreement that ATT could, you know, a sort of severe impact on Facebook's business. If we're all in agreement there, then we can just look at the data. Like if we all sort of agree on these propositions and we can just look at the data and what has happened to Facebook's business? Well, it has been, you know, severely impaired recently. Now, and roughly in alignment with the rollout of ATT right now, is it just a coincidence? Is it the only factor? No, of course not. Of course, it's not the only factor. And I make that point in the ATT recession. I say, of course, the sort of COVID reversion to the mean in terms of user behaviors has also created a headwind. But the thing is with the ATT recession, I point out, well, we can actually isolate those impacts in some ways, right? And we can say, well, like Google search is not really impacted by ATT at all. It just isn't, right? It's, you know, browser based. And so we'll look at the change in growth rates for Google search versus YouTube, which is that's part of UAC. That's Google's app install product, right? But also e-comm, advertisers there. And there was that feedback loop with conversions. And the YouTube, starting from a much lower baseline, saw a much sort of like a larger headwind in its growth rates than CIRST did. Well, what else explains that, right? Because COVID would impact both, right? So that was the point I'm making the app tracking transparency recession. So I would say like, if, you know, that's, that's my sort of vigorous database argumentation there, but I think if you just look back to this stuff that I've been running for a couple of years, I've been making the point for a couple of years that, wow, these products that Facebook rolled out and Google rolled out to, they really improved performance. And so if you believe that, then you'd have to believe that if those products were essentially disabled, that the performance would suffer to roughly the same magnitude.
Speaker 2
So if you had to be pinned down to a number, what percentage of Facebook's growth decline?
Speaker 1
I think it's high. I think it's the worst case. I think it was around 12%, 12 to 15%. I think it was very serious. And the thing is, look, you know, these, I'm sort of walking you through like, you know, abstract theoretical exercises. You're just going to talk to everybody. You can talk to anybody that runs Facebook ads whose business was dependent on that. And they'll tell you this was devastated. And you could talk to like a brand advertiser or someone at a big agency that works for Coca-Cola and they'd say, what's HTT? What are you talking about? You know what I mean? And so like you have to kind of think about this from the perspective of what is the goal of that marketer. And so for direct response, especially for categories that were heavily dependent on Facebook and other platforms like that, Snap, TikTok, Google UAC, right, they would tell you the same thing. Right now, if you go talk to a brand advertiser, they'd say, it said no impact. I don't know what you're talking about. What's HTT? I never even heard of that. And they'd be right too. Now, the question is what proportion of Facebook's revenues brand versus direct response, I think it's vast majority direct response, probably like 70%. Right now for snap is not, snap is lower, right? And YouTube's lower. But Facebook specifically was vulnerable to this, right? Given the high reliance on direct response and the fact that they were just frankly better at doing this than a lot of other platforms.
Speaker 2
I want to move on from this. Let's talk about investing. So some of our listeners may not know that Eric, you also run a small VC fund that focuses on mobile called Heracles Capital. I am actually an LP in that. So I'm a little excited about that. So what's given the carnage and front that you jump in here to what's investable in mobile user acquisition or mobile advertising or this whole world, isn't it something you'd want to stay