Worried about Apple’s new privacy update, Snapchat and Unity Software warn investors of its impact

Apple’s new privacy update, App Tracking Transparency, is the talk of the town. As the Spring release time is closing in, developers that run personalized ads are growing anxious over the impact of the feature on their revenue. In that regard, CNBC reports that Snap Inc. and Unity Software have warned investors of the “upcoming impact from Apple’s new privacy update. Now, the two companies have joined Facebook in voicing concerns over the iOS ATT feature on collecting users’ data to run targetted ads.

As a second layer of protection, the ATT feature will require developers to ask permission before tracking users’ online activity on iPhone. Apple calls the upcoming privacy feature a fundamental human right and says that it is not disallowing targetted ads business on its platform but is eliminating invasive means to collect and store users’ data without their knowledge or consent. And this step towards protecting users’ privacy worries digital advertisers like Snap Inc., Unity Software, Facebook, Google, and others.

Snap Inc. and Unity Software warn investors of Apple’s new privacy update

Currently, Apple uses IDFA (identifiers for advertisers) system which allocates a unique code to its devices that is not personally identifiable, for advertisers to track iPhone users’ online activity. Now, the company is set to replace IDFA with ATT feature which is designed to give users control of their data via opting-in or out of tracking across apps and websites. And that freedom to choose worries companies like Snap Inc. and Unity Software. CNBC writes that,

Unity Software said in its earnings report that the changes to IDFA will affect the way mobile game developers get new customers and “how they optimize lifetime customer value.”

“Although it’s difficult to estimate, our guidance assumes IDFA changes begin in the spring and will reduce our revenue by approximately $30 million, or 3% of revenue, in 2021, the company wrote.”

Snapchat chief financial officer, Derek Andersen expressed that Apple’s new privacy update presents “a risk of interruption to demand” in the company’s Q4 earnings report.

“It is not clear yet what the longer term impact of those changes may be for the topline momentum of our business, and this may not be clear until several months or more after the changes are implemented,” he said.

The chief business officer Jeremi Gorman of Snap Inc. said,

“The reality is we admire Apple, and 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.

Overall, we feel really well prepared for these changes, but changes to this ecosystem are usually disruptive and the outcome is uncertain.”