Apple’s privacy updates, which rolled out in June and July, prevent advertisers from tracking iPhone users without their consent. As a result, advertisers ended up spending much less than expected as the changes make it difficult to measure and manage their ad campaigns.
More than 10 analysts covering Snap’s shares lowered their price target to $ 25, with many warning that the impact of Apple’s move would persist into next year as Snap will implement its own tools to attract advertisers.
“The changes in the Apple iOS announcements had a much larger effect, than virtually no one expected, on Snap’s fourth-quarter outlook,” said Doug Anmuth, an analyst at JP Morgan in a note.
Anmuth expects the short-term impact of the privacy changes to be more acute for Snap than it is for Facebook, Alphabet or Twitter. The brokerage estimates that at least two-thirds of Snap’s fourth-quarter revenue will decline as a result of the move.
Snap, which derives the vast majority of its revenue from the sale of digital advertising in its app, said the problem was compounded by global supply chain disruptions and labor shortages, prompting brands to cut their prices. advertising expenses.
“These three are industry-wide issues, not Snap-specific issues, and we expect them to be raised on an ongoing basis during the third quarter earnings season,” said Evercore ISI analyst Mark Mahaney.
With information from Reuters.