Snap says Apple's privacy changes hurt its ad business more than it expected

Snap finally sees the impact of Apple's iOS 14 privacy changes in its ad business, and it is seeing a greater impact than expected.
For the third quarter of 2021, revenue was just over $1 million. Snap's third-quarter revenue was just over $1 billion, which is a milestone that is new for the company. However, this figure was only $3 million less than what it had previously estimated. Snap executives claimed that the shortfall was largely due to Apple's iOS changes, which make it harder for advertisers to track users.

Evan Spiegel, CEO of Apple, stated that the changes in iOS ad tracking were disruptive to our advertising business. The changes were widely rolled out by Apple in June/ July. We expected some disruption in business, but the new Apple's measurement solution didn't scale as well as we expected. This made it more difficult for advertising partners to manage and measure their iOS ad campaigns.

Snap was not all bad news, however. Snap beat all expectations in user growth with 13 million daily active users, a second quarter record. Snap now has 306 millions DAUs, which is a record for the company.

Spiegel acknowledged that it was a disappointing setback for the company but said that privacy protections were essential for the long-term health of the ecosystem. This is something we support.

Developers had to ask iOS 14.5 users to agree to share their device identifier (also known as IDFA) with advertisers in order to track users across different apps and services. Although Apple had already seen the changes over a year before the release, it wasn't until April that the update was released. Third-party analytics has estimated that only a small fraction of iOS users have consented to apps tracking them.