So far this year, shares in Meta have fallen 46%, with Alphabet down by 21%, Apple by 15% and Netflix by 62%. Tech stocks, the price of which can be based on expectations of strong future earnings over many decades, can be relatively less appealing than the immediate fixed returns on offer from investments such as bonds, which become more attractive in a higher lending rate environment. Advertising has not been the only factor in their decline. Tech stocks have been hit this year as rising inflation around the world has combined with interest rate increases from central banks to rattle investors.
Twitter, mired in a legal dispute with would-be suitor Elon Musk, reports results later on Friday. Investors are expecting the slowest-ever pace of growth for social media ad revenue this year, as rising inflation and other economic woes cause brands to slash their marketing budgets. The company is normally one of the first of the social media firms to report second-quarter earnings and is viewed as a bellwether for similar stocks. It recently launched a premium service called Snapchat Plus, which costs $3.99/£3.99 a month and offers features such as the ability to message friends from your desktop.įacebook owner Meta, Google owner Alphabet and other companies that sell online ads lost about $80bn in combined stock market value on Thursday after Snap’s results. Advertising is Snap’s main source of revenue. The California-based company said it would significantly slow hiring, invest in its advertising business and find new sources of revenue in order to grow at a faster pace. Mike Proulx, a research director at analysis firm Forrester, said: “While the platform’s user base remains strong, Snap’s ad-centric model is no longer a sure bet and is especially volatile heading into a period of economic headwinds where marketers are sure to pull back their ad spend.” Snap said revenue in the current third quarter was flat compared with the prior year.ĭaily active users on Snapchat rose 18% year-over-year to 347 million, beating consensus estimates of 344 million users. The figure grew 13% from the prior-year quarter. Snap’s revenue for the second quarter ending on 30 June was $1.11bn (£930m), missing analyst expectations of $1.14bn, which pushed its shares down by a quarter to $12.33. "Given that Apple continues to take billions of dollars a year from Google Search, the incentive clearly is for this policy discrepancy to continue," Wehner said.Snap, which generates more than two-thirds of its revenue in North America, said some advertisers continued to face supply-chain disruptions and labour shortages, and many others were contending with rising costs amid record inflation, which has led to cuts in spending on advertising. He referenced how much money Google makes for Apple as the default search engine on the Safari browser. Wehner suggested that Apple's changes aren't having the same impact on search as they are on other types of apps. She also said that measuring whether those conversions occur is becoming more difficult.Ī day before Facebook's results, Alphabet blew past estimates with its fourth-quarter numbers, and cited strength in e-commerce ads, an area where Facebook saw weakness. Sandberg said the changes are diminishing the accuracy of Facebook's ads, driving up prices based on an outcome like a sale or download.
It's a theme Facebook has hit repeatedly in its attacks on Apple. Sheryl Sandberg, Facebook's operating chief, said on Wednesday that ATT would hurt small businesses that rely on digital advertising to grow and are much more dependent than larger companies on personalized ads. The next day, Apple CEO Tim Cook used Facebook's app in a tweet as an example of how the feature works. In December 2020, Facebook ran a marketing campaign including full-page ads in major newspapers blasting the feature and saying that the change was about "profit, not privacy." Online advertising companies have voiced their displeasure with the feature since it was first announced in June 2020, but Facebook has been the loudest in its criticism.
IPhone apps with targeted advertising can instead use SKAdNetwork, an Apple tool built as an alternative, which Apple says is more private.
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The privacy feature disrupts the behind-the-scenes mechanics of many mobile ads, especially those that confirm whether a purchase or download was made. If the user says no, the app developer can no longer access the IDFA, a device ID that's used to target and measure the effectiveness of online ads.Ī study from ad measurement firm AppsFlyer in October suggested that 62% of iPhone users were choosing to opt-out of sharing their IDFA. Personal Loans for 670 Credit Score or LowerĪTT consists of popups that ask users whether they want to be tracked when opening up an app. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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