Snap is finally seeing the effects of Apple’s privacy changes in iOS 14 on its advertising and the changes have had a bigger impact than he expected.
The company reported revenue of just over $ 1 billion for the third quarter of 2021. But despite this being a new milestone for Snap, it was $ 3 million less than what the company had previously estimated. Snap executives said Apple’s iOS changes that make it harder for advertisers to track users are mostly to blame for the flaw.
“Our advertising business has been disrupted by changes to iOS ad tracking that Apple largely introduced in June and July,” CEO Evan Spiegel said during interviews with analysts. “While we expected some degree of downtime, the new measurement solution offered by Apple did not increase as we expected, making it difficult for our advertising partners to measure and manage their iOS ad campaigns.”
Still, not all was bad news for Snap. The company exceeded expectations in terms of customer growth, adding 13 million new daily active customers in the second quarter in a row. Snap now has 306 million DAU, which is a new high for the company.
Still, Spiegel called it a “frustrating setback” for the company, but added that increased privacy protection “is really important for the long-term health of the ecosystem and something we fully support.”
The iOS 14.5 update forced developers to ask users to explicitly agree to share their device identifier (known as IDFA), which advertisers use to track users in apps and services. Although Apple reviewed the changes more than a year ago, the update was not released. Since then, third-party analysts have estimated that a percentage of iOS users have agreed to allow apps to track them.
Snap isn’t the only company to have warned of Apple’s iOS changes in its advertising business. Facebook, which has been publicly posting the changes for more than a year, said the changes will have a huge impact on developers and small businesses. But Facebook has also warned investors that the changes are likely to hurt its advertising revenue. The social network announces its earnings in the third quarter on Monday, when it will share how significantly it has affected it.
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