Founder and CEO of Bumble Whitney Wolfe
Vivien Killilea | Getty Images Entertainment | Getty Images
Bumble, the online dating apps company, said in its IPO filing on Friday that changes like Apple’s upcoming privacy updates could hurt its business.
Bumble said it expects only 0 to 20% of app users to agree to sign up to share a unique ID called the IDFA for targeted advertising following Apple’s upcoming change. That could result in a higher cost per registration for app developers and a more limited ability for advertisers to accurately target and measure campaigns for specific users, Bumble said.
The company, which said in the document it will trade under the $ BMBL ticker on the Nasdaq, operates dating apps Bumble and Badoo. In its risk factors, it included the IDFA change in a section about its reliance on third-party publishers and platforms to distribute and market its products. It said that if those parties restricting, prohibiting or modifying distribution or marketing, it could adversely affect Bumble’s business.
Apple’s change will show users popups in every app asking for permission to track users, with an option to allow or deny tracking. Advertisers use the ID, when available, to target ads and measure their effectiveness. But the change is expected to dramatically impact advertisers’ ability to target ads as they have been as people are unlikely to sign up.
Bumble earns revenue from online advertising, but says the revenue comes mainly from recurring subscriptions and in-app purchases. It also pays off for ads to bring in new users. The company said ad spend for the year ended December 31, 2019 totaled $ 130.4 million.
Tech companies are bracing for the impact of the changes caused by IDFA when enforcement begins this year. In a December note, analysts from Bank of America said Facebook and Snap are most at risk from the changes, potentially creating a 3% headwind for Facebook and a 5% headwind for Snap.
Israeli mobile games developer Playtika, which began trading on the Nasdaq on Friday, also called out the IDFA changes to its S-1.
“If players choose to use the opt-out mechanisms in greater numbers, our ability to deliver effective ads would suffer, which could negatively impact our in-game ad revenue,” said Playtika’s S- 1.
The Bumble S-1 says that 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 is no guarantee that it would not be limited to using certain marketing channels in the future and that his business could be significantly impacted if that were to happen for a significant period of time.
Bumble also said it relies on Facebook for targeted advertising and performance marketing.
“In the event that we are no longer able to run targeted advertising and performance marketing through Facebook, our user acquisition and revenue stream could be significantly impacted,” said the S-1.