“Our read-through points to Google and Twitter as safe places for investors to ride out near-term headwinds.” “Expect IDFA- related issues to cause havoc across retail and app-related iOS advertisers,” he wrote. He kept his buy rating on Snap’s stock but lowered his price target to $71 from $87.īernstein’s Mark Shmulik wrote that Snap “gets to be the bellwether of digital ads” since the Apple-related measurement issues and supply shortages are likely to apply to the whole sector. “However, this is certainly an important issue, especially for the long tail of that need measurable to justify ad spending.” He noted that, “encouragingly,” Snap’s management team sounded upbeat about advertising effectiveness and mainly pointed to problems related to measurement. That’s Not Why Alphabet’s Stock Is Dropping. “Given the amount of resources Google and Facebook have invested in developing aggregated measurement approaches to prepare for privacy changes, we believe it will take some time for Snap to develop an effective measurement tool as well,” he wrote.įrom Barron’s: Google Charges Higher Fees for Ads, Lawsuit Says. MoffettNathanson’s Michael Nathanson expressed some concerns about Snap’s ability to deliver adequate measurement tools to advertisers amid the changing landscape, especially relative to the competition. “That said, we doubt any company tied to digital ad spending will be immune to these issues, including Facebook, Alphabet, and others.” “Given Snap’s size, maturity, and ad technology stack relative to the much larger, more experienced, industry leaders, we believe the company is more susceptible to these challenges,” he wrote of the privacy issues and supply-chain disruptions. analyst Brian White also suggested that Snap could see greater impacts than some rivals. He has an overweight rating on Snap’s stock but said that his model is “under review.” The company faces an “unfavorable operating environment” that “calls into question the achievability of 50%+ multiyear revenue growth outlook.”ĭon’t miss: The spending life of teens revolves around Nike, Chipotle and Snapchat Nowak had previously identified nine factors that could help Facebook offset the Apple pressures, and heading into that company’s earnings report next week, he still thinks at least five are “fully intact.” Several other big internet companies look to be in a better spot, in his view, including Google, which is less exposed to Apple’s tracking issues and also has a large advertiser base that could hold up more strongly given the macroeconomic effects of supply crunches. Of the eight factors that Nowak initially thought could help Snap withstand the Apple impacts, six “have proven to be less effective than hoped,” he wrote. The company is heavily exposed to direct-response advertising, which is heavily impacted by the Apple changes, and it will likely take “months or quarters” before Snap can fully roll out tools that help marketers better track the effectiveness of their campaigns in this new environment, Morgan Stanley’s Brian Nowak wrote. Now Snap looks to be in a worse position than several of its peers when facing the privacy challenges, according to Morgan Stanley’s analysis. Facebook, on the other hand, struck a more cautious tone. On Snap’s prior earnings call, executives highlighted how users had been opting into allowing ad-related tracking at seemingly higher rates than had been reported elsewhere in the industry, which seemed an upbeat signal of Snap’s ability to weather the challenges. In recent months, internet companies had been expressing varying degrees of jitters about Apple’s privacy changes, which offer users more control over how their information can be used for ad targeting. Snap shares dropped 26.6% in Friday trading, and the other decliners included Facebook Inc.’s Opinion: Snap points to possibility of Apple causing the long-feared ‘ad-mageddon’
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