(Bloomberg) -- Web advertising company Criteo SA dropped the most in more than two years after announcing that its previous forecast underestimated the effect of Apple Inc.’s latest iPhone software update on its business.
In September, Apple released new versions of its iOS and macOS operating systems, the software that runs on iPhones, iPads, and Macs, that included a feature called Intelligent Tracking Prevention in the Safari web browser. The feature limits advertisers’ abilities to collect data on users such as the websites they visit. Criteo, and other ad targeting companies, collect user data in order to show people ads more relevant to their interests.
Criteo said Nov. 1 it anticipated Apple’s changes to have a 9 percent to 13 percent net-negative impact on its 2018 revenue, but now expects the impact to be about 22 percent net-negative. Apple’s iOS 11.2 software update, released earlier this month, “disables the solution that some companies in the advertising ecosystem, including Criteo, currently use to reach Safari users,” Paris-based Criteo said Thursday in a statement. However, the security changes began rolling out in September with the release of iOS 11 and macOS High Sierra.
Criteo’s American depositary receipts fell 26 percent to $23.40 at 11:54 a.m. in New York after earlier declining as much as 30 percent, the biggest intraday drop since August 2015.
Alphabet Inc.’s Google, which also has a vested interested in being able to display ads, said in September that it would alter some of its algorithms to comply with Apple’s web browser changes. For its part, Criteo said it’s also working on a solution.
“We are focused on developing an alternative sustainable solution for the long term, built on our best-in-class user privacy standards, aligning the interests of Apple users, publishers and advertisers,” the company said. “This solution is still under development and its effectiveness cannot be assessed at this early stage.”
Apple defended its changes in September ahead of the release of the software updates, saying its new feature “does not block ads or interfere with legitimate tracking on the sites that people actually click on and visit.”
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