Snapchat parent company Snap has added its voice to the tech companies complaining that iOS 14’s privacy measures could hurt its business.
Releasing its Q4 2020 earnings Thursday, the company’s CFO Derek Andersen said that the Apple changes might disrupt Snap’s ad-centric business model.
“It is not clear yet what the longer term impact of those changes may be for the top-line momentum of our business, and this may not be clear until several months or more after the changes are implemented,” he said.
Advertising is big for Snapchat
Snapchat generates virtually all its revenue from advertising. One of the big ways it does this is by showcasing personalized brand ads between your friends’ stories. Initially Snap targeted ads only according to age, location, and gender. However, since then it has deepened the kind of analytics that can be used to target ads.
Apple’s new privacy features will offer more transparency about how certain apps track users. This will give users the chance to decline tracking, which would, by extension, hurt tech companies that rely on ads. The feature has yet to roll out for users, although Apple says it is coming this spring.
Snap chief business officer Jeremi Gorman said that, “Overall, we feel really well prepared for these changes. But changes to this ecosystem are usually disruptive and the outcome is uncertain.”
However, Gorman noted that Snapchat respects Apple’s decision. “The reality is we admire Apple,” she noted. “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.”
In contrast to Facebook
This is in stark contrast to Facebook, another company which has spoken publicly about how Apple’s new privacy measures will affect its business. Facebook has already launched two days of full-page newspaper ads opposing Apple’s new privacy features. Facebook argues that stopping advertisers from using personalized advertising will hurt small businesses. (And itself as well.)
Mark Zuckerberg, Facebook’s CEO, recently said that, “we increasingly see Apple as one of our biggest competitors.” The rivalry might wind up making its way to court, showing just how contentious it has become.
Privacy has been one of Apple CEO Tim Cook’s main interests during his time running Apple. In a recent interview for Fast Company, Cook likened user privacy to climate change in terms of its importance.
Source: CNBC
