Apple ATT raised telehealth CAC

Apple’s privacy change weakened the core growth engine that made Ro and Hims work in the first place. These businesses were built on buying highly targeted Facebook and Instagram ads, moving people into a fast online intake flow, then recovering that ad cost through repeat refills of low cost generics. Once iOS 14.5 required apps to ask permission before tracking across other companies’ apps and websites, ad targeting and measurement got worse, so each new subscriber became more expensive to acquire.

• The unit economics were already fragile. Ro and Hims relied on free consultations and low cost monthly prescriptions, but the category also had roughly 50 percent yearly churn and limited cross sell beyond ED, which meant they needed a steady stream of efficiently acquired new customers just to keep growing.
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• ATT hit at the same time as the telehealth land grab. Ro, Hims, Keeps, Cerebral, Calibrate, Nurx, and others were all bidding for the same intent driven clicks. That pushed CAC up through normal auction pressure, then ATT made those same ads less targetable and harder to measure, which raised cost per acquired subscriber further.
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• The strategic response was to look for channels less dependent on paid social. Internal research shows telehealth companies moving toward retail distribution and hybrid care, with Hims selling through Walgreens and Ro through Walmart. Hims also disclosed $230.4M of advertising costs for customer acquisition and content production in 2024, showing how central paid media remained even as the playbook evolved.
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The long term effect is that telehealth winners will look less like pure paid media machines and more like healthcare brands with repeat demand, broader product bundles, and alternative distribution. The more revenue comes from chronic care, labs, retail shelves, employer channels, and existing customer cross sell, the less exposed the model is to the next platform level change in ad targeting.