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Snap reports ad losses amid privacy shift

Snap's ad sales saw a dip in Q1 due to a host of factors, including a shift in Apple's rules around how apps can track users.

2 min read

Social Media

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Snap reported a net loss of $360 million for the first quarter due to a variety of factors affecting digital ad sales, including shifting privacy policies that require Apple users to opt into being tracked by apps such as Snapchat.

As many users opted out when the policy went into place last year, it became more difficult for marketers to target their ads to specific demographic groups and limited their ability to determine whether ad campaigns were effective, the Wall Street Journal reports. 

Other factors that contributed to Snap’s losses included some clients momentarily halting advertising amid the war in Ukraine, supply chain disruptions and economic volatility, Chief Financial Officer Derek Andersen said on an earnings call last week.

Snap has been working to roll out first-party measurement tools that would help advertisers reach target audiences even under stricter privacy measures. Andersen said such solutions now comprise 90% of the company’s direct response ad revenue.

“We are cautiously optimistic that the partners who utilize these lower funnel [goal-based bidding ad tools] will benefit from the more holistic and timely measurement of results that our first-party measurement solutions afford, as they build confidence in them over time,” he said. 

Snap also reported some progress with Dynamic Ads, which automatically update product catalogs to reflect marketers’ latest offerings in real time. Revenue from those ads more than tripled from a year prior, according to the company.

Snap expanded other offerings for advertisers as well, including Snap Star Public Stories, which gives some influencers the option to launch mid-roll ad revenue sharing programs through their Stories. Influencer marketing has become an important channel for marketers reaching users through apps such as Snapchat.

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