Tim Cook, Apple’s CEO, gives a keynote speech during the European Union’s data protection conference in the EU Parliament on October 24, 2018 in Brussels, Belgium.
Yves Herman | Reuters
Snap and Unity Software, which reported fourth quarter earnings after Thursday’s bell, both warned of the impending impact of Apple’s privacy changes this spring.
To target mobile phone ads and measure their effectiveness, app developers and other industry players currently often use Apple’s (IDFA), a unique sequence of letters and numbers on every Apple device. However, once a data protection update is released, app makers must ask permission to access a user’s IDFA via a command prompt. A significant proportion of users are expected to say no, which is likely to make the targeted advertising less effective.
The changes have become a major controversy for ad-supported companies like Facebook, which are expected to lose revenue from the change. But Facebook is far from being alone.
Unity Software said in its earnings report that the changes to IDFA will affect the way mobile game developers acquire new customers and “how they optimize customer experience for life.”
“While difficult to predict, our predictions are that IDFA changes will begin in the spring and will reduce our sales by about $ 30 million, or 3% of sales, in 2021,” the company said wrote.
In prepared comments on its fourth quarter earnings report, Snap’s chief financial officer Derek Andersen said the Apple changes would pose a risk of disrupting demand for their implementation.
“It is not yet clear what the long-term impact these changes could have on the dynamics of our business and it may not be clear for months or more after the changes are implemented,” he said.
Shares of both companies fell after close on Thursday, with Snap down more than 10% and Unity down more than 15%.
Apple is currently testing the data protection update in a beta version of iOS 14, which is expected to be available to all users in “spring”.
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