Snap shares plummet 24% over effect of Apple privacy changes

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Snap lost a quarter of its value in after-hours trading on Thursday as social media groups announced that the outlook for the fourth quarter was bleak and blamed Apple’s recent privacy changes.

Snapchat’s parent warned that next quarter’s revenue would be between $ 1.16 billion and $ 1.2 billion, well below the current consensus estimate of $ 1.4 billion, according to S & P Capital IQ.

Evan Spiegel, CEO of Snap, said that since Apple introduced a new privacy policy between April and June, it has become difficult for advertisers to understand the performance of the campaign and it has dragged revenue. Said that.

The rule, which Spiegel states has “overturned” the industry, requires apps in Apple’s App Store to obtain explicit permission from users to track them for advertising purposes.

“Although some business turmoil was expected, Apple’s new measurement solution couldn’t scale as expected, making it more difficult for ad partners to measure and manage iOS ad campaigns.” He said.

Spiegel said advertising performance hasn’t really deteriorated, but added that the company is currently rebuilding its own advertising infrastructure.

Snap also recorded revenue of $ 1.07 billion, up 57% in the three months to the end of September, down $ 3 million from previous revenue guidance. Net loss for the quarter fell 64% to $ 72 million.

Spiegel also cited the broader macroeconomic challenges of the coronavirus pandemic that affected results, such as advertiser supply chain issues and labor shortages.

Snap, whose share price rose 52% this year at Thursday’s closing price, lost nearly 24% of its value within minutes of the announcement of after-hours trading, clearing $ 30 billion from market value.

Meanwhile, Facebook’s share, which reports revenue on Monday, fell 4.5% during non-business hours. Other “super publishers” reported a small overtime decline. Alphabet’s share fell 2.8%, Pinterest fell 2.9%, and Roku fell 3.2%.

“Snap has succumbed to the same force that is destroying the entire mobile advertising ecosystem, which was facilitated by Apple’s privacy policy,” said Eric Seufert, a mobile advertising technology consultant. “Facebook seems likely to report similar business friction on Monday.”

Due to Apple’s changes, advertisers will no longer receive real-time details about the results of their ads, instead having to wait 72 hours for aggregated data.

Some observers are affected by the changeApocalypticOthers were optimistic that they would have a milder effect.

Nevertheless, some advertisers have Android or Apple search ads..

Facebook said Last month, “Measurement became difficult” [the effectiveness of ad] It’s a campaign on our platform, and we estimated it to be “underreporting iOS web conversions by about 15%.”

Snap shares plummet 24% over effect of Apple privacy changes Source link Snap shares plummet 24% over effect of Apple privacy changes

The post Snap shares plummet 24% over effect of Apple privacy changes appeared first on California News Times.

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