Soon after the fourth-quarter earnings were reported, Snap and Unity Software got warned about the potential impact of upcoming Apple privacy changes. apple idfa unity idfagrahamcnbc. As of now, most of the app developers use Apple’s identifier for advertisers (IDFA) in order to target mobile ads and measure their effectiveness. However, once the update rolls out, the app makers will be forced to seek permission to access a user’s IDFA via a prompt. This is a concern as a significant portion of users are expected to say no. This will ultimately reduce the effectiveness and impact of the targeted advertisements.
As a result, the upcoming changes have become a major point of contention for all ad-supported companies which even include Facebook. However, Facebook is not alone in the eye of the storm as other companies are expecting some revenue loss. Unity Software has estimated the revenue to go down by 3% or $30 million as the IDFA changes rolls out in the spring. Even though, the exact figures are difficult to estimate.
Even the chief financial officer of Snap, Derek Andersen said that there’s a risk of interruption to demand as the changes are implemented. The chief business officer of the company Jeremi Gorman has been working with Apple in preparation for the changes. to educate its advertisers in order to make long-term investments to use more first-party data for advertising. Alongside, the company is even planning to provide advertisers with more opportunities to sell their products and services via Snap directly through Snapchat.
Apple is currently testing the privacy update that will be released in a beta version of iOS 14. Shares of both companies experienced a downfall in after-hours trading after the reporting was done. Snap was down with more than 10% and Unity by 15%.