Apple’s iOS advertising changes have put Meta’s shares through the wringer, however, Snap which was also affected by the new policies has recovered much quicker than anticipated.
Snap’s direct response advertising has, by and large, avoided the turbulence of Apple’s iOS changes and consequently the stock has rocketed up 58 per cent in after-hours.
According to Snap, CFO, Derek Anderson, “Direct response advertising was once again the largest driver of our growth.”
“We observed that advertisers began to recover from the initial disruption caused by the iOS platform changes and their resultant impact on the ability of our advertising partners to measure the results of their advertising investments.”
Snap managed to post a Q4 revenue of $US1.3 billion ($A1.82 billion) which was an increase of 42 per cent year-over-year.
This result far and away exceeded bearish analyst estimates on earnings, revenue and user growth.
It’s also the first time Snap has posted a quarterly net profit.
However, despite these positive signs, Apple’s iOS privacy changes won’t be without their challenges.
Anderson stated, “We believe it will take time to achieve broad enablement, utilisation and full confidence in these measurement solutions among our advertiser base.”
Though Anderson was pleased with the early progress that’s been made and quite clearly, shareholders agree.
Meta’s Weak Results
In a completely different story, Meta’s stock prices have dived off a cliff after the company reported Apple’s privacy features would cost it billions.
Apple’s extraordinary plan to make a more private web is evidently a major disruption to the short-term prospects of Meta.
In a comment to investors, Meta, CFO, David Wehner, said, “On the impressions side, we expect continued headwinds from both increased competition for people’s time and a shift of engagement within our apps towards video surfaces which monetize at lower rates than Feed and Stories.”
He added, On the pricing side, we expect growth to be negatively impacted by, Apple’s iOS changes as well as macroeconomic challenges like inflation which are impacting advertiser budgets.
Meta slumped 26 per cent overnight, with $US237 billion ($A332 billion) wiped off its market cap.
Of note, this is the largest one-day drop in market value in history.
Laura Hoy, “Meta CEO Mark Zuckerberg may be keen to coax the world into an alternate reality, but disappointing fourth-quarter results were quick to burst his metaverse bubble.”
Many other tech giants like Twitter and Pinterest have followed Meta in a downward spiral however, bucking the trend, Amazon shares have soared off the back of cloud revenue beats and its fast-growing advertising business.
Amazon shares were up 14 per cent in after-hours trading.
