Bumble IPO Submitting Warns of Apple IDFA Privateness Adjustments
Founder and CEO of Bumble Whitney Wolfe
Vivien Killilea | Getty Images Entertainment | Getty Images
Online dating app company Bumble said in its IPO filing on Friday that changes like Apple’s upcoming privacy updates could affect its business.
Bumble estimates that only 0-20% of app users will agree to share a unique ID called IDFA for targeted advertising after the upcoming move from Apple. This could result in a higher cost per registration for app developers and a more limited ability for advertisers to precisely target and measure campaigns for specific users, Bumble said.
The company, which announced in the document that it will trade on the Nasdaq under the $ BMBL ticker, operates dating apps Bumble and Badoo. In its Risk Factors, the IDFA change has been incorporated into a section on reliance on third party vendors and platforms to distribute and market its products. If these parties restrict, prohibit or change this distribution or marketing, it could affect Bumble’s business.
Apple’s change prompts users with pop-ups in each app asking for permission to track users, with the option to either allow or deny tracking. Advertisers use the ID, when available, to target ads and measure their effectiveness. However, the change is expected to have a dramatic impact on advertisers’ ability to target ads the way they were, as users are unlikely to choose to do so.
Bumble makes income from online advertising, but says its earnings come mostly from recurring subscriptions and in-app purchases. It is also worth advertising to attract new users. The company announced that advertising costs for the fiscal year ended December 31, 2019 were $ 130.4 million.
Tech companies brace themselves for the impact of the changes brought about by IDFA when enforcement begins this year. In a December statement, Bank of America analysts said Facebook and Snap were most at risk from the changes, potentially creating a 3% headwind for Facebook and a 5% headwind for Snap.
Israeli mobile game developer Playtika, which began trading on Nasdaq on Friday, also pointed out the IDFA changes in its S-1.
“If players chose to opt out in greater numbers, our ability to deliver effective advertising would suffer, which could negatively impact our in-game advertising revenue,” said S -1 from Playtika.
According to Bumble S-1, certain publishers and channels have restricted or banned ads for dating products for a variety of reasons, including “bad behavior” by other services. Bumble said there was no guarantee that the use of certain marketing channels could not be restricted in the future and that business could be significantly affected if this were done over a long period of time.
Bumble also said it relies on Facebook for targeted ads and performance marketing.
“If we are no longer able to conduct targeted advertising and performance marketing through Facebook, our user acquisition and our revenue streams can be severely affected,” says the S-1.