Snap Tells Investors Apple's Opt-In Ad Tracking Privacy Measure Presents 'Risk' to Advertiser Demand

With Apple's upcoming iOS 14 privacy changes looming, Snap on Thursday warned investors that they could hurt Snap's ad business (via Reuters).

Starting with the next versions of iOS 14, iPadOS 14, and tvOS 14 due to be released in the early spring, Apple's App Tracking Transparency privacy measure will require all apps to request the user's permission to track their activity across other apps and websites.

Granting permission would allow developers to access the random advertising identifier, known as the Identifier for Advertisers (IDFA), on the user's device for targeted advertising purposes or to measure how effective their campaigns were.

According to Snap, makers of Snapchat, any changes to iOS are "usually disruptive" and present an uncertain outcome, and the planned IDFA changes could present a "risk" to advertiser demand. However, the company added that it was unclear how that could affect business in the long-run.

A handful of ad networks and companies have criticized Apple's decision, including Facebook, which ran full-page newspaper ads and launched a website claiming that Apple's tracking change will hurt small businesses financially.

But during an earnings call with analysts, Snap Chief Business Officer Jeremi Gorman reportedly struck a different tone, saying that Snap shares Apple's philosophy on protecting users' privacy.

"We admire Apple and believe they are trying to do the right thing for customers," Gorman said, adding Snap is well prepared to guide advertisers through the iOS changes.

During the earnings call, Snap revealed that user growth and revenue beat analysts' fourth-quarter estimates. SnapChat made the biggest gains outside the U.S. and Europe, with 55% growth in daily active users. Revenue generated mainly from ad sales grew 62% to $911 million, easily surpassing Wall Street's consensus estimate of $857.4 million, reports Reuters.