Apple has impacted the advertising business with the introduction of App Tracking Transparency (ATT).
In April, Apple released an update for iPhones that allowed users to easily opt-out of receiving ads from apps by tapping a button “Ask App Not to Track”. Over six months later, it is clear most iPhone users did opt-out. This privacy feature has upended the behind-the-scenes mechanics of many mobile ads According to an October report from AppsFlyer, 62% of people who see the pop-up opt-out, while only 38% opt-in. This means users who opt-in have become even more valuable to advertisers who rely on the data they receive from the 38% to fine-tune campaigns for the 62% who opt-out.
While ATT provides more privacy for iPhones users, it has also proven lucrative for Apple, becoming responsible for 58% of all iPhone app downloads compared with 17% a year ago. Financially, it is estimated Apple could earn $5 billion from advertising in 2022.
The reason for the dramatic rise in app downloads from Apple Search Ads (ASA) is because they have the same advantage Google Ads have on Google’s website, which is high intent. ASA shows ads primarily in the App Store, so if Apple can get the right ad in front of a person, they are more likely to click on it and install it.
ATT has had a significant impact on the revenue of the advertising industry. Part of the reason for this is that ad firms are stuck with a 72-hour delay on ad data, and it is only provided in aggregate form, where Apple’s advertising services can provide an immediate great level of detail.
For example, if you owned and marketed a mobile app in 2019, you could share the device identifiers of your best and most engaged users with Facebook and ask Facebook to find you more users. With device identifiers from thousands of apps and its users, Facebook could look for other people and show your ads to them. Now, this is no longer possible.
Platforms such as Snapchat, Facebook and others have condemned the update, as it cost them approximately $10 billion; consumers have reacted well to it.
Part of the reason for the positive reaction from consumers has in part been driven by Apple’s advertising. For example,
“Our approach is simple,
To provide a platform where people can find what they care about……..
Personal relevance guides us……
We provide strong safeguards against fraud….”
Apple markets its change as customer-centric, driven by personal relevance and providing security, which has received such a positive response from clients.
While Apple’s ATT has had an impact on the search ad market, Bernstein analyst Toni Sacconaghi stated that while Apple’s search advertising generates $4 billion annually and has 60% of the app search ad market share on iPhone, search ads are only a fraction of the entire mobile ad market. While Apple’s products may be more competitive because they access targeting data, other ad companies can’t; Apple’s ATT focuses on limiting data transfer between third parties, which doesn’t apply to its first-party advertising.
Apple’s ATT may have had an immediate impact on revenue and the ability of other platforms to access data in the short term. However, Facebook, Snapchat and Peloton are adapting to the new market and believe they can develop their first-party technology to assist their customers.
What does this mean for businesses in the short term?
While ATT has attracted attention to Apple’s advertising business, which focuses specifically on mobile ads for apps, Apple’s most notable ad product is its Apple Search Ads. These ads (ASA) allow developers to buy keywords on the Apple App Store to appear at the top of searches.
Businesses that are applicable need to be using Apple Search Ads (ASA) as part of their user acquisition strategy. The reason for using ASA is due to the competition that the changes implemented by Apple are driving.