Apple has impacted the advertising business with the introduction of App Tracking Transparency (ATT).

WHAT IS 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.

IMPACT OF ATT FOR APPLE

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.

IMPACT ON OTHER MARKET PLAYERS

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.