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Opinion: Apple’s ‘Ad-Magadon’ is affecting Snap, Facebook, Google and Twitter differently


Snap Inc. After losing more than a quarter of its market value last week and taking away other Internet stocks, Apple’s recent privacy changes were expected to overturn the entire Internet advertising market.

But it turns out: not so much, at least not so far. When Facebook Inc. FB,
-3.92%
And Alphabet Inc. Of GOOG,
+ 0.65%
GOOGL,
+ 1.35%
YouTube showed some impact in their earnings reports this week, they weren’t as dramatic as Snap Snap,
+ 1.63%
Experienced and Twitter Inc. TWTR,
-1.09%
Saw only moderate effects. Google in particular seems immune to the problems, as its rival Android operating system distinguishes its products from Apple’s changes.

On Tuesday, both Alphabet and Twitter reported third-quarter results that were able to avoid a significant blow to their revenue as a result of Apple AAPL’s changes,
+ 0.46%
Its iPhone is built in iOS which allows users to opt out of tracking by advertisers. Snap has hit the hardest so far, but Facebook has also said it has suffered losses due to changes in its revenue, and both companies have given disappointing forecasts for the fourth quarter.

Investors who were concerned about the potential impact of these changes were relieved by Alphabet’s results, which exceeded expectations, while its YouTube business was only slightly affected, executives said.

“So overall, as we said, we’re satisfied with the strength of our business in the third quarter, it was broad-based, it’s global,” said Ruth Porat, chief financial officer at Alphabet. “Especially in terms of iOS 14 changes, they had a decent impact on YouTube revenue.” YouTube’s revenue came in at $ 7.2 billion, with analysts’ consensus estimates ranging from $ 7.4 billion to nearly $ 200 million.

“Google search is less affected by Apple IDFA changes than some other digital advertising companies,” Chris Rosbach, chief information officer at J Stern & Co. in London, said in an email. He said Google has seen an advantage in moving some ads to search. “Besides, many Google users have computers or Google’s own Android operating system. These results demonstrate the resilience of Google search. “

In a note to clients on Tuesday, Bernstein research analyst Mark Schumacher said the alphabet shares proved a refuge.

“With hair across the name of digital advertising, Google seemed to be a safe place for investors to hide, and for the most part, they were right,” he said. “With moderate earnings rates, endless staggering strengths in operating margins and gray hair-inducing headwinds, investors [were] Hiding here makes sense for their decision. Listen to ‘squid game’ music “

Twitter added that the impact so far has been less than expected.

“It’s too early for Twitter to assess the long-term impact of Apple’s privacy-related iOS changes, but the Q3 revenue impact was lower than expected, and we’ve included an ongoing moderation impact in our Q4 guidelines,” Twitter executives said in a letter to the company’s shareholders on Tuesday.

However, there was one more factor that had an amazing effect.

Snap executives said in their conference call that global supply-chain issues are affecting advertising because companies do not want to advertise products with their limited supply.

Google added that almost all specific verticals were consistent with widespread supply-chain weaknesses, such as in the auto industry.

So while the long-awaited Internet “ad-mazedon” may be overflowing among tech giants and affecting each company differently, investors should still pay attention.



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