How Apple Snapped Snap

"The key is that Apple has changed its privacy policies, and as a result, users can deny permission to be tracked" -- PYMTS

From "Snap Earnings Spotlight Platforms’ Revenue Woes After Apple Privacy Switch" posted Friday on PYMTS:

Call it the “Apple problem.”

In Snap’s earnings results announced Thursday (July 21), the social media company recorded its weakest-ever quarterly sales growth, where sales were up 13% year on year to $1.1 billion.

But beyond the top-line growth deceleration, where years ago that metric had been up triple-digit percentage points (and the compound annual growth rate, or CAGR, had been 50%), lies a deeper set of pressures that served to send the shares crashing roughly 40% Friday (July 22).

Yes, the company has decided to cut spending. Yes, the digital advertising market is seeing competition. But the steep drop, and the tens of billions of dollars in lost market cap that Bloomberg estimated had been seen in sympathy across platforms speaks to something larger.

The key is that Apple has changed its privacy policies, and as a result, users can deny permission to be tracked...

During the question-and-answer session with analysts, Snap Chief Financial Officer Derek Andersen said “the deceleration began with the platform policy changes implemented in Q3 of last year.” The changes are impacting the traditional models that are “used to drive the direct response to advertising business, as well as the tools used to measure the returns from that direct response advertising.”

My take: This may be the clearest case of ad tracking cause-and-effect yet.

9 Comments

  1. David Emery said:
    “The key is that Apple has changed its privacy policies, and as a result, users can deny permission to be tracked…”

    THIS is what Congresscritters should be looking at! It’s not just the direct contact spies (Facebook, Google), it’s the underlying data broker industry, all of which runs well under-the-radar of regulation.

    There was a piece on NPR with Sen Markey complaining about police being given access (under limited circumstances, a claim of life-threatening emergency) to Ring video data without a warrant. But I’d trust the police with my data more than I trust the surveillance industry, including Amazon. (Of course, the NPR interviewer didn’t raise that point. It’s too easy to poke at the misbehavior of the police than to consider the broader, more complex issue.)

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    July 23, 2022
  2. Jerry Doyle said:
    “…. My take: This may be the clearest case of ad tracking cause-and-effect yet.”

    I don’t buy that Apple snapped SNAP. When 94 year old Aunt Matilda, 7 year young Trace, and all the others I observe in between those ages have their heads buried in TicTok, then I only can assume logically the culprit isn’t big bad Apple as many would like to point to; but good old fashion capitalistic competition. Even the article repeats multiple times that competition is the reason when it says, “…. We are also seeing increasing competition for advertising dollars that are now growing more slowly….. we face a number of very large and very sophisticated competitors….. we’re seeing the overall advertising pie grow at a slower rate.”

    Give me a break! To lay this problem at the feet of Apple’s ATTS is disingenuous.

    6
    July 23, 2022
    • Steven Philips said:
      Jerry: I don’t think it’s an issue of the number of people USING the platforms as much as the lower monetization of the user. And that CAN be attributed to Apple’s anti-auntie tracking. 🙂
      At some level I think the increased competition for those $$ MIGHT also be part of it. But seeing quite if/how is beyond my ability.

      3
      July 23, 2022
    • Robert Paul Leitao said:
      Thank you, Jerry! Rather than looking at where ad dollars have been disappearing, we should be looking at where ad dollars are flowing and ad dollars are flowing to Apple. Apple is building an impressive global content platform that’s attractive to consumers and advertisers. Yes. Capitalist competition. It’s a constituent outcome of strong customer relationships combined with privacy and security to protect the interests of the company’s customers. If you want access to the world’s best customers, advertise world-class products and services. There are few places today to find those customers on a global scale outside of Apple.

      5
      July 23, 2022
  3. Michael Goldfeder said:
    It’s all about giving the user tools to decide for themselves whether they want to be tracked at all. Bu the haters and trolls all transmute this unique opportunity for privacy choice as a way for Apple to profit at the expense of Snap, Facebook, and the other monetizing companies.

    Haters will hate, and Congress critters will follow their trail as they’re equally as ignorant.

    6
    July 23, 2022
    • David Emery said:
      I’m appalled that the narrative “Apple is preventing small businesses from reaching customers” gets traction without being challenged “Maybe those who use Apple’s Opt-Out don’t want that. Why shouldn’t the end user have that right to decline targeted advertising?” I’m convinced that much of the claims for targeted advertising is A Big Lie, but then I’m generally not the preferred target audience (affluent millennials…) I don’t want ANY ADS unless I’m explicitly shopping for something.

      2
      July 23, 2022
  4. I’m wondering if Apple Lockdown Mode, to be released in September, will further deter overzealous social media and other apps from digging in my walled garden. They’re nothing but nosy moles seeking my private roots.

    2
    July 23, 2022

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