Snap Inc., owner of the photo-messaging app Snapchat, says upcoming privacy changes by Apple could hurt Snap’s ad business although user growth and revenue beat analysts’ fourth-quarter estimates, reports Reuters.
Those changes include iOS 14 in which iPhone users would be asked for consent to track their data for personalized ads. Snap said this could could present a “risk” to advertiser demand, but was unclear how that could affect business in the long run, according to Reuters.
“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,” said Tom Johnson, chief transformation officer at ad agency Mindshare Worldwide.
The change to iPhone software will make it harder for companies like Snap Inc. and Facebook and their advertisers to track people across apps. Developers must ask users to share their device’s unique identifier for advertising purposes through a prompt.
The identifier for advertisers or IDFA is the only means for advertisers to precisely target and track users within apps on iOS devices. Think of an IDFA as something like a cookie that is tied to devices instead of browsers, in that it enables an advertiser to get notified when a user of a phone has taken an action like clicking on their ad in a browser and then installing, using, or interacting with ads in their app.
As noted by the Invoca Blog, the identifier is used in non-browser apps, which never had support for cookies. IDFAs only provide advertisers data in aggregate and no individually identifiable data is available.
Apple says it “does not access or use the IDFA on a user’s device for any purpose.” The company says its aim is to protect the privacy of its users and that iOS 14 gives users greater control over whether apps could link with third parties for the purposes of targeted advertising.
