Opinion: Apple’s “ad-mageddon” affects Snap, Facebook, Google and Twitter differently

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After Snap Inc. lost more than a quarter of its market value and dragged other internet shares with it last week, there were concerns that Apple’s recent privacy changes could upend the entire web market. Internet advertising.

But it turns out: not so much, at least for now. While Facebook Inc. FB,
-3.92%
and GOOG from Alphabet Inc.,
+ 0.65%
GOOGL,
+1.35%
YouTube showed some effects in its revenue reports this week, they weren’t as dramatic as the Snap SNAP issues,
+1.63%
experimented. And Twitter Inc. TWTR,
-1.09%
saw only modest effects. Google in particular seems immune to the problems, as its competing Android operating system isolates its products from Apple’s changes.

On Tuesday, Alphabet and Twitter both released third quarter results that managed to avoid significant revenue impacts due to changes Apple AAPL,
+ 0.46%
made to his iPhone iOS which allows users to turn off tracking by advertisers. Snap has been the hardest hit so far, but Facebook has also said its revenue has been affected by the changes, and both companies gave disappointing forecasts for the fourth quarter.

Investors worried about the potential impact of the changes were relieved by Alphabet’s results, which exceeded estimates, while its YouTube business was only modestly impacted, executives said.

“So overall, like we said, we’re happy with the strength of our business in Q3, it was large, it was global,” said Ruth Porat, Alphabet’s CFO. “Regarding the changes to iOS 14 in particular, they had a modest impact on YouTube’s revenue.” YouTube’s revenue reached $ 7.2 billion, about $ 200 million lower than analysts’ consensus estimate of $ 7.4 billion.

“Compared to some other digital advertising companies, Google search is less affected by changes to Apple’s IDFA,” said Chris Rossbach, chief information officer of J. Stern & Co. in London, in a statement. E-mail. He said Google may have seen an advantage in switching from advertising to search. “In addition, many Google users are on computers or on Google’s own Android operating system. These results highlighted the resilience of Google’s search.

In a note to clients on Tuesday, Bernstein Research analyst Mark Shmulik said Alphabet shares were a safe haven.

“With hairs all over the names of digital ads, Google seemed like a safe place for investors to hide and, for the most part, they were right,” he said. “With modest revenues, continued surprisingly strong operating margins and no known gray-haired incremental headwinds, investors [were] justified in their decision to hide here. Listen to the music of “Squid Game”

Twitter also said the impact has so far been less than expected.

“It’s still too early for Twitter to assess the long-term impact of Apple’s privacy-related iOS changes, but the impact on Q3 revenue has been smaller than expected, and we’ve included a continued modest impact in our forecast for the fourth quarter, ”Twitter executives said. in the letter to the company’s shareholders on Tuesday.

However, there was another factor that had a surprise impact.

Snap executives said on their conference call that issues in the global supply chain are impacting advertising because companies don’t want to advertise products they have in limited supply.

Google added that almost all of its specific verticals were in line with the widespread weakness in the supply chain, such as in the auto industry.

So while the dreaded Internet “ad-megeddon” among tech giants has perhaps been overblown and affects every business differently, investors still need to be careful.


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