Bumble IPO file warns of Apple IDFA privacy changes

Online dating app company Bumble said in its IPO filing on Friday that changes like Apple’s privacy updates could hurt its business.

Bumble said he expects only 0 to 20% of app users to agree to share a unique ID, called IDFA, for targeted advertising after Apple’s move. This could result in increased cost per registration for app developers and a more limited ability for advertisers to accurately target and measure campaigns for specific users, said Bumble.

The company, which said in the document that it will trade under the $ BMBL ticker on Nasdaq, runs the dating apps Bumble and Badoo. In its risk factors, it included changing the IDFA in a section on its reliance on publishers and third-party platforms to distribute and market its products. He said that if those parties limit, prohibit or alter this distribution or marketing, it could adversely affect Bumble’s business.

Apple’s move will show users pop-ups in each application that ask for permission to track users, with an option to allow or deny tracking. Advertisers use ID, when available, to target ads and measure their effectiveness. But the change is expected to have a dramatic impact on advertisers’ ability to target ads the way they have done, as people are unlikely to accept it.

Bumble earns revenue from online advertising, but says its revenue is derived primarily from recurring subscriptions and in-app purchases. It is also worth announcing to get new users. The company said advertising expenses for the year ended December 31, 2019 totaled $ 130.4 million.

Technology companies are preparing for the impact of the changes caused by IDFA when the application starts this year. In a December note, Bank of America analysts said Facebook and Snap are at greater risk from the changes, potentially creating a headwind in revenue of 3% for Facebook and a headwind of 5% for Snap.

Israeli mobile game developer Playtika, which started trading on Nasdaq on Friday, also cited IDFA’s changes to its S-1.

“If players choose to use the exclusion mechanisms in greater numbers, our ability to deliver effective ads would be impaired, which could adversely affect our in-game advertising revenues,” said Playtika’s S-1.

Bumble S-1 says that certain publishers and channels have limited or banned ads for dating products for a variety of reasons, including because of the “bad behavior” of other services. Bumble said there is no guarantee that he would not be limited to using certain marketing channels in the future and that his business could be materially affected if it happened for a significant period of time.

Bumble also said he relies on Facebook for targeted ads and performance marketing.

“In the event that we are no longer able to conduct targeted advertising and performance marketing through Facebook, our user acquisition and revenue stream may be adversely affected,” says S-1.