Twitter Expects Apple's App Tracking Transparency Changes to Have 'Modest Impact' on Revenue

Twitter today shared its fourth quarter earnings results and provided some details on expected expenses and revenue in 2021. As noted by CNBC, Twitter believes that Apple's upcoming App Tracking Transparency requirements will have a "modest impact" on revenue.

Looking ahead, Twitter said it expects revenue to grow faster than expenses in 2021, assuming the pandemic continues to improve and taking into account an expected "modest impact" from Apple's upcoming privacy changes to iOS 14. However, the company warned it expects headcount growth of more than 20% this year, with overall expenses increasing more than 25%.

Starting with the launch of iOS and iPadOS 14.5, app developers are required to get permission from users before tracking them using an advertising identifier called the IDFA. Many developers and ad agencies that rely on ad revenue and ad tracking are worried that the change will impact income, as most people are not expected to agree to be tracked.

Twitter did not go into detail beyond suggesting the change will have a modest impact on revenue in 2021, but Facebook has been fighting heavily against Apple's planned changes. Facebook has taken out newspaper ads, written blogs, and tried to convince people that Apple is going to kill small businesses by implementing the more stringent privacy controls.

Snap has also claimed that Apple's opt-in ad tracking measures will present a "risk" to advertiser demand, but Snap Chief Business Officer Jeremi Gorman recently said that Snap admires Apple's privacy tweaks and is "well prepared to guide advertisers through the iOS changes."

Twitter, Facebook, Snap, and other app developers will need to comply with Apple's ad tracking consent guidelines starting when iOS 14.5 launches, with the update expected to come in the early spring. Under the terms of the new rules, when a person declines to be tracked, apps are also restricted from using alternative methods to track the user across apps and websites.