What you need to know
- Snapchat's parent company has warned iOS 14 privacy changes could impact its advertising demand.
Snapchat has warned that iOS 14 privacy changes could impact its advertising business.
Snap Inc, owner of popular photo-messaging app Snapchat, on Thursday warned that upcoming privacy changes by Apple Inc could hurt Snap's ad business although user growth and revenue beat analysts' fourth-quarter estimates.
According to the report, Snap said the upcoming changes "could present a 'risk' to advertiser demand" but that it was unclear how it might impact its business in the long run. Shares for Snap fell 75 in post-market trading following the comments.
One ad agency expert told Reuters that "The disruption to ad targeting caused by the iOS 14 privacy changes will clearly be a worry for Snap, which has been steadily growing its armory of ad formats and advertisers."
Unlike Facebook, Snap CBO Jeremi Gorman said the company admired Apple and thought it was "trying to do the right thing for customers". Snap further noted it was ready to help advertisers navigate the changes.
Facebook has publicly and vocally decried the changes, claiming they will impact its advertising business and the smaller firms that use them. Last week Apple confirmed that planned App Tracking Transparency changes will be a requirement from the next beta of iOS 14, released to developers earlier this week. It means that going forward, app developers will have to ask users to opt-in if they want to be tracked using an IDFA identifier across multiple services, a feature used primarily to target advertising. A recent Harvard Business Review study claims numbers used in a Facebook campaign against the changes were misleading.
