Bumble IPO filing warns that Apple’s privacy changes could harm its business

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

Bumble said it expects only 0-20% of app users to agree to share a unique identifier, called IDFA, for targeted advertising following Apple’s upcoming change. This could result in an increase in the cost per signup 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 that it would trade under the symbol $ BMBL on the Nasdaq, runs the Bumble and Badoo dating apps. In his risk factors, he included the change in IDFA in a section on its reliance on publishers and third-party platforms to distribute and market its products. He stated that if such parties limit, prohibit or modify such distribution or marketing, it could harm Bumble’s business.

Apple’s change will prompt users with pop-ups in every app that ask for permission to follow 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 have a huge impact on the ability of advertisers to target ads the way they’ve been because people are unlikely to participate.

Bumble earns revenue from online advertising, but says its revenue comes mostly from recurring subscriptions and in-app purchases. It also pays for advertising to attract new users. The company said ad spend for the fiscal year ended Dec.31, 2019, was $ 130.4 million.

Tech companies are bracing for the impact of changes caused by IDFA when the application begins this year. In a December note, analysts at Bank of America said Facebook and Snap were the most exposed to the changes, which could create a 3% headwind for Facebook and 5% for Snap.

Israeli mobile game developer Playtika, which started trading on the Nasdaq on Friday, also called the IDFA changes in its S-1.

“If players choose to use opt-out mechanisms in greater numbers, our ability to deliver effective ads would suffer, which could hurt our in-game advertising revenue,” S-1 said. Playtika.

The Bumble S-1 reports that some publishers and channels have restricted or banned advertisements for dating products for a variety of reasons, including “bad behavior” from other services. Bumble said there is no guarantee that it will not be restricted in the use of certain marketing channels in the future and that its business could be significantly affected if this happens 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 conduct targeted advertising and performance marketing through Facebook, our user acquisition and our revenue stream could be significantly affected,” S-1 says.