What you need to know
- Snapchat's parent company Snap has missed its Q3 revenue target.
- Shares in the company plunged 25% as it revealed Apples' privacy changes in iOS 14 have crushed its advertising business.
- It says it will focus on first-party solutions.
Snapchat's parent company Snap has revealed it missed its earnings target for Q3 because of privacy changes made to iOS 14 by Apple, causing shares in the company to plunge 25%.
On Thursday Snapchat announced that its revenue had increased 57% year on year to over $1 billion for the first time. Snapchat has 306M daily active users, up from 293M in July of this year. Despite this, Snap shares fell by a massive 25% on the back of news that Snap missed its Q3 earnings targets, in part because of changes made by Apple to privacy and ad tracking on all of its best iPhones.
Chief Business Officer Jeremi Gorman said on a call to investors:
Gorman says Snap is "continuing to work through the ongoing changes to digital advertising driven by Apple's App Tracking Transparency framework." It says it saw meaningful adoption in June and July, and that the changes "have upended many of the industry norms and advertiser behaviors that were built on IDFA, Apple's unique device identifier for advertising, over the past decade, which now require a double opt-in by users in order to access directly."
Gorman said Apple's new SKAdNetwork (SKAN) solution that lets advertisers track the performance of their advertising has not performed as expected:
Gorman said Snap's partners had found a "variety of concerns about its limitations", for example, they can no longer see measurements like the time between viewing an ad and a user taking action as a result. He also highlighted reporting delays and how advertisers "are unable to target advertising based on whether or not people have already installed their app."
Snap said that as a result of this, it was focusing more on "first party privacy-safe solutions", and that otherwise, it continued to see "strong, sustained performance in our app advertising platform."
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Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.
Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple. Follow him on Twitter @stephenwarwick9