Snap and Pinterest reported financial results that showed how their smaller size and unique advertising base allowed them to avoid the blow of Apple’s decision to require apps to ask iOS users for permission to collect data.
On Thursday, Facebook owner Meta Platforms had more than $200 billion vaporized a day after it blamed Apple’s changes for impacting the company’s fourth-quarter results. While shares of Snap and Pinterest were initially pulled by Meta’s report, their shares catapulted 55% and 20%, respectively, on Thursday after demonstrating ad revenue strength.
Apple’s data protection update, called App Tracking Transparency, launched in April on its iOS devices and enabled users to block apps from tracking activity and data usage.
According to Snap, by the end of the fourth quarter, many of its advertisers had adopted a tool from Apple to measure ad effectiveness. Advertisers, who account for 75% of sales in its business geared toward driving sales as well as other customer actions from ads, had begun using another Snap product to measure the results of their ads.
This has helped Snap’s advertising business bounce back from Apple’s changes “quicker than we anticipated,” said Snap Chief Financial Officer (CFO) Derek Andersen.
In addition, Snap is likely to have benefited from the fact that most of its advertisers are large brands with marketing resources that allow them to adapt quickly to changes in the industry. Meta’s advertisers, however, are predominantly small to medium-sized businesses that cannot adapt so quickly, said LightShed Partners analyst Rich Greenfield.
Meanwhile, digital pinboard firm Pinterest is investing in video features and creator-led content to increase engagement and advertising revenue.
Todd Morgenfeld, Pinterest’s CFO, said in an interview that the company had not suffered much of an impact from Apple’s changes, but could do so in the future.