Snap, Unity Warn Of Ad Disruption Resulting From Apple’s Privacy Change

Snap, Unity Warn Of Ad Disruption Resulting From Apple’s Privacy Change

by  @lauriesullivan, February 5, 2021

Snap, Unity Warn Of Ad Disruption Resulting From Apple's Privacy Change | DeviceDaily.com

Snap and Unity Software, both of which reported Q4 2020 earnings this week, warned of the impact Apple’s privacy changes will have on advertisers.

Derek Andersen, CFO at Snap, said forthcoming changes to Apple’s iOS 14 will “present another risk of interruption to demand,” although it’s not clear what “the longer-term impact of those changes may be for the top-line momentum” of its business.

Although Apple is trying to protect consumer privacy and “do the right thing,” Andersen warned investors of the disruption based on the company’s privacy changes may not be clear for many months.

Apple plans to release a privacy feature in the first quarter of 2021 that will require users to opt in to apps collecting their data from other companies’ apps and websites. 

Snap has been working closely with Apple to implement the SKAdNetwork, an aggregate method for measuring attribution of mobile ad campaigns for iOS apps. Andersen says the company’s prepared for the change, but typically these types of disruptions lead to uncertain outcomes.

When Unity CEO John Riccitiello provided revenue guidance for Q1 2021 during the company’s Q4 2020 earnings call, he projected revenue of $950 million to $970 million for the year. The guidance takes into account multiple factors like an estimate one-time hit in 2021 — approximately $30 million to revenue or just “over 3% as advertisers become accustomed to the new IDFA approach being implemented by Apple.”

Apple’s privacy changes have been a major concern for Snap and Unity, as well as for Facebook and advertisers.

Apple is testing the privacy update and plans to release it in early spring when it rolls out iOS 14.

Advertisers point to proving performance and measuring the number of people who see ads on mobile phones and take action, and tasks that were simple in the past decade such as measuring the number of phones that recently installed new apps as major challenges.

Facebook plans to encourage iPhone and iPad users to allow online tracking by serving a screen touting online tracking immediately before showing people Apple’s upcoming privacy screen, which asks users to decide whether or not to allow tracking.

MediaPost.com: Search & Performance Marketing Daily

(3)