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14th May 2022

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Zynga acquisition brings adtech in-house after Apple privacy changes

The mobile gaming group Zynga, owner of hundreds of popular iPhone applications, is buying the advertising technology platform Chartboost for $250m in the latest example of how changes to Apple’s privacy rules are shaking up the tech industry.

The iPhone maker now requires every app wanting to track personal data and share it with third parties to ask for user consent first — threatening to reduce the personalisation of ads and, consequently, the money app developers such as Zynga make for them.

The acquisition of Chartboost means Zynga will bring technology for personalising ads in-house, so it does not need to share data. Chartboost, founded in 2011 in San Francisco, says its technology reaches more than 700m monthly users and it participates in more than 90bn ad auctions a month.

Applovin, a Zynga rival, embarked on a similar strategy earlier this year when it purchased the adtech group Adjust for $1bn.

“Never let a good crisis go to waste,” Zynga chief executive Frank Gibeau told the Financial Times. Through vertical integration and owning more of the ad network, Zynga realised “we’d get full data sets coming in” on users, creating the right environment for tailoring ads, he said.

The acquisition was announced alongside Zynga’s first-quarter earnings, in which it raised 2021 guidance after reporting record revenues of $680m, up 68 per cent from a year ago and ahead of forecasts of $648m, according to estimates compiled by Visible Alpha.

For the full year it now expects revenues of $2.7bn, up $100m from its previous projection and 37 per cent above 2020.

Revenues from in-game purchases rose 62 per cent to $557m in the quarter. Advertising revenues climbed 108 per cent to $123m.

Gibeau predicted that other companies will also create “walled gardens” to leverage data from their user bases and sever their dependence on third-party ad platforms. Apple itself is also now expanding its ad network on the iPhone.

2021-05-05 20:53:10

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By admin