Apple Changes Privacy Rules For Targeted Ads, Affects Revenue Growth For Poshmark

Apple Changes Privacy Rules For Targeted Ads, Affects Revenue Growth For Poshmark

Apple iOS has recently decided to amend its Privacy Policy regulations, where users shall not be shown targeted or personalized ads without their prior approval. Due to this businesses will have to incur increased costs on paid advertisement, identifying demographics, and getting conversions.

All these may sound like trivial changes, however, for large corporations, it means losses of millions of dollars, which delays their return to the growth trajectory post-COVID-19.

One such company affected recently is Poshmark, the online apparel resale brand, which faced increased losses than predicted, they further said that the losses were calculated at around 9 cents on every share, 20% more than what was anticipated roughly. The revenue yield predicted by the forecasters at Wall Street stood somewhere shy of $83 Million.

Poshmark saw its shares in the pre-market trades at around 30.4% lower value to end up somewhere around $17.08 after making a high of $105 earlier this year.

They also stated that the amends made by Apple in their privacy rules shall slow down the future growth to a certain extent, as the market will have to be re-understood better over a period of time. Snap Inc. and Facebook Inc., two of the most important social media platforms also said that the uncertainty created due to the changes in the policy shall affect their main business on the Apple iOS.

“For the remainder of the year, we expect marketing as a percentage of revenues to be in the high 40s due to higher cost in digital advertising as a result of Apple privacy changes,” interim CFO Kapil Agrawal told investors on a conference call late Tuesday.

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He further said that “We expect that uncertainty due to COVID and its effect on reopening timelines across international markets launched in 2021 will result in a slower ramp-up than what we had initially expected for next year, impacting growth rates.”

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