Bumble is gearing up for an IPO and in its filing, it has listed Apple’s iOS privacy changes as a major risk factor that could hurt its business practices.
The privacy change coming in a future iOS 14 update will show a privacy pop-up when an app wants to track its users, similar to how location and notifications permissions are requested from users. Users can easily decline access to their tracking information, which would hide the tracking ID from companies and make it more difficult for users to be targeted for ads.
Bumble expects impact on revenue because of Apple’s iOS privacy changes
CNBC notes that Bumble expects just 0 to 20% of its users to consent and share their tracking information with the app.
Bumble said it expects just 0 to 20% of app users to agree to opt-in to sharing a unique ID, called the IDFA, for targeted advertising following the upcoming change from Apple. That could result in increased cost per registration for app developers and a more limited ability for advertisers to accurately target and measure campaigns for specific users, Bumble said.
This is not surprising at the least as Apple’s privacy changes are aimed at giving users control over who they can share their data with. Companies have to learn to build trust with their customers to be able to ask for the tracking information, and not take it for granted.
CNBC reports that game developer Playtika, which recently went public, also cited these privacy changes in its IPO filing:
“If players elect to utilize the opt-out mechanisms in greater numbers, our ability to deliver effective advertisements would suffer, which could adversely affect our revenues from in-game advertising,”
Bumble’s troubles increase because it heavily relies on Facebook for targeted advertisement. As Facebook will also be subjected to the same privacy changes on iOS, Bumble expects this change to impact its marketing efforts.
“In the event that we are no longer able to conduct targeted advertisement and performance marketing through Facebook, our user acquisition and revenue stream may be materially adversely affected,”
Unfortunately, the Internet ad industry has been built over the years with little to no respect for user data privacy, and now that Apple is trying to fix the issue on its platform, companies are unhappy about it. Facebook has made a huge fuss about this change and launched newspaper ads against Apple’s changes, claiming that it is “standing up” for small businesses. Apple has refused to budge and said:
“We believe that this is a simple matter of standing up for our users. Users should know when their data is being collected and shared across other apps and websites — and they should have the choice to allow that or not. App Tracking Transparency in iOS 14 does not require Facebook to change its approach to tracking users and creating targeted advertising, it simply requires they give users a choice.”
App Tracking Transparency changes are already rolling out to some iOS 14.4 beta testers and expected to go live for all users this quarter.