Big Tech dodged impact of Apple’s privacy changes in ‘red hot’ digital ad market… for now

The logos of Google, Apple, Facebook, Amazon and Microsoft displayed on a mobile phone and a laptop screen.

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All eyes were on the potential negative impact of Apple‘s recent privacy changes on tech stocks over the past week, but earnings from companies like Facebook and Snap showed they were able to manage any fallout amid a surge in digital ad spend.

Some tech companies warned Apple’s changes to ad privacy will sting more in the third quarter, but analysts think any impact could be more minimal than originally expected, especially as companies build out new tools to measure and target ads without the use of all the data they’ve historically enjoyed. 

But as companies move into the second half of the year, they’ll have to face a tougher comparative period along with any harsher impact from Apple’s privacy changes, which give users more transparency and control over apps that want to track them for advertising.

J.P. Morgan analysts pointed out that “every online ad company will have significant [year-over-year deceleration]” in the second half of 2021. 

Meanwhile, the ongoing shift of ad spend to digital channels may help mitigate those factors as a global economic recovery is driving big demand for digital ads. As Wedbush analysts put it, the digital ad market is “red hot.” 

Here’s what Wall Street’s saying about Apple’s impacts on the big tech ad businesses in the second quarter.


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Google and Amazon

Google appears to be a short-term beneficiary of any impact from the Apple changes. MKM Partners said its checks and industry conversations show smaller advertisers are shifting ad dollars toward Android apps in the interim as attribution and measurement challenges are happening on iOS. 

“We continue to believe that Google remains a near-term beneficiary of the iOS-related ad targeting headwinds with advertisers preferring to shift budgets to AdMob and Ad Manager,” Bernstein analysts wrote. “We expect to see this tailwind normalize at some point, but with iOS 14.6 adoption ramping in June, we think this strength could persist through 3Q.”

Amazon, which wasn’t expected to see as much impact from Apple’s changes, saw a striking 87% growth year-over-year in its ads business in the second quarter. The company appears well-poised to stomach the privacy-related changes impacting the digital ad world given its strong first-party relationship with consumers.  

— CNBC’s Michael Bloom contributed reporting.

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