Apple’s app tracking transparency is affecting Snap’s ad business, causing Snap shares to drop 25%

In the middle of 2021, Apple released iOS 14.5, which gave users the ability to opt-in to App Tracking or opt-out. The tracking refers to gathering information about you and using that to help advertisers from other companies.

Unsurprisingly, the majority of people chose to opt-out of tracking, with only 6% of Americans opting-in and 15% of global users doing the same. While less tracking and better privacy benefits almost everyone, it’s not so good if you’re in the ad business.

CEO Evan Spiegel of Snap, the company behind Snapchat, said that Apple’s new iOS privacy changes are affecting Snap’s ad business revenue, causing them to earn USD 3 million (RM12.4 million) less than what they expected this quarter. Bear in mind that Snap earned more than a USD 1 billion (RM4.1 billion) in the same period.

“Our advertising business was disrupted by changes to iOS ad tracking that were broadly rolled out by Apple in June and July,” said Spiegel. He continued, “While we anticipated some degree of business disruption, the new Apple provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS.”

After Spiegel announced the news in a call with analysts, Snap’s shares plummeted by 25% in after-hours trading. It’s also affecting other companies as well, with Facebook shares dropping by 6%, Twitter dropping by 7%, and Alphabet falling 3% on the same day.

Despite the terrible effect on his business, CEO Evan Spiegel is an avid supporter of app transparency. He said that Apple’s iOS privacy changes were “really important for the long term health of the ecosystem and something we fully support.” He also defended Apple when the feature first came out, saying “We’re really aligned with them on the changes they’re making to help protect privacy, and so far, the early investments we made starting almost 10 years ago to protect user privacy on our platform are really paying off.”

Some companies are not too keen on Apple’s new app tracking transparency. Facebook, for example, has been scrambling for users to allow tracking in their apps ever since the feature came out.

Even though big tech companies are struggling to keep up with these new privacy rules, I think it’s great that we’re heading in a more secure future. As a society, our privacy is very important and it’s good that we aren’t giving away our data so willingly now.

[ SOURCE, 2, 3, IMAGE SOURCE ]

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