It’s easy to lose sight of just how big and powerful Apple is – until something like this occurs, at which point everything comes pouring back.
Snap stock dropped 27 percent yesterday, its worst day in history, after the company revealed that an Apple privacy update was hurting its ad revenue on Thursday evening. The stock also drove other social media stocks, including Facebook, Twitter, and Pinterest, down with it. In total, over $150 billion in market value was destroyed.
What exactly did Apple do? Apple launched a privacy feature in April that prompts users to choose whether or not they want their location recorded by apps. If consumers choose not to participate, apps such as Snapchat will be unable to target them with the most appropriate advertisements. Then, after a campaign has concluded, gathering and evaluating data to determine how it performed becomes a difficult task.
In a nutshell, Apple hurled a smoothie in the direction of the mobile advertising sector. “Apple iOS ad modifications played out worse than practically anybody had expected in Snap’s Q4 projection,” according to JPMorgan analyst Doug Anmuth, despite the fact that its consequences were predicted to be negative at the time.
Is there anyone who benefited from the update?
The name of this corporation is…you might want to take a seat for this…Apple, and it is a company whose advertising business is booming.
Apple has become a key participant in advertising as a result of its privacy upgrade, which has allowed it to undercut the exposure of its competitors. Since introducing the feature six months ago, Apple has more than tripled its market share.
Within a half-year, Apple Search Ads went from playing in the minor leagues to winning the World Series, according to Alex Bauer, Branch’s head of product marketing. “It’s like Apple Search Ads went from playing in the minor leagues to winning the World Series,” Bauer said.
According to predictions from Evercore ISI, Apple’s ad business will generate $5 billion this year and grow to $20 billion each year within three years.