Unity Technologies and Snap Inc. both warned the Financial Community yesterday that Apple's new Privacy Feature will Ding their bottom lines
On January 28, Patently Apple posted a report titled "As Facebook's CEO Gnashes his teeth, Apple commemorates 'Data Privacy Day' by sharing a report titled "A Day in the Life of Your Data." Of course it's not only Facebook that will be hit hard by Apple's new privacy feature when it arrives this spring, Snap Inc. and Unity Technologies after the bell on Thursday also warned of the upcoming impact from Apple’s privacy changes.
CNBC reports that to target mobile ads and measure how effective they are, app developers and other industry players currently often use Apple’s identifier for advertisers (IDFA), a unique string of letters and numbers on every Apple device. But once a privacy update rolls out, app makers will be forced to ask permission to access a user’s IDFA through a prompt. A significant portion of users are expected to say no, which is expected to make targeted advertising less effective.
The changes have become a major point of contention for ad-supported companies like Facebook, which appears set to lose revenue from the change. But Facebook is far from alone.
Unity Software said in its earnings report that the changes to IDFA will affect the way mobile game developers get new customers and "how they optimize lifetime customer value."
The company wrote: "Although it’s difficult to estimate, our guidance assumes IDFA changes begin in the spring and will reduce our revenue by approximately $30 million, or 3% of revenue, in 2021."
In prepared remarks for its Q4 earnings report, Snap Inc. chief financial officer Derek Andersen said the Apple changes would present a risk of interruption to demand after they’re implemented.
Andersen added that "It is not clear yet what the longer term impact of those changes may be for the topline momentum of our business, and this may not be clear until several months or more after the changes are implemented."
Anderson further stated that "The reality is we admire Apple, and we believe that they are trying to do the right thing for their customers. Their focus on protecting privacy is aligned with our values and the way we’ve built our business from the very beginning." For more, read the full CNBC report.