Tracking Update Could Net Apple Billions In Search Ads Revenue
Apple capitalized on the privacy changes that came with the introduction of iOS14 earlier this year by making significant gains in search ad market share, iPhone app downloads, and revenue, according to Apple Inc. financial times Transfer.
Its transparency initiative in app tracking was a good business move for Apple, as evidenced by the brand’s advertising activity with more than three times its market share in the six months following the update.
It wasn’t great news for everyone.
Killing off the Identifier for Advertisers (IDFA), the random device identifier that Apple assigns to users’ devices, has seriously affected advertisers’ abilities to serve personalized ads on other platforms.
Brian Bowman, CEO of Consumer Acquisition, Tell VentureBeat In July advertisers saw revenue drop 15% to 20%, and some experienced losses of up to 40%.
in a statment Last year, Apple explained its motivations for adding an opt-in prompt to track targeted ads:
“We believe technology should protect users’ fundamental right to privacy, and that means giving users tools to understand which apps and sites may share their data with other companies for advertising or ad measurement purposes, as well as tools to revoke permission for such tracking.”
However, this commitment to privacy comes at a cost that has infuriated many — perhaps none more so than Facebook.
Facebook warned declaring that Apple’s change could “significantly limit your marketing efforts” and “harm small business growth and the free Internet”.
Facebook, an advertising giant in its own right, said in a statement:
“Apple’s proposed changes will limit your ability to effectively reach, understand, and engage people on mobile devices and across the web.
It will affect your ability to understand performance, control who sees your ads, and make informed decisions about your advertising budgets.
As these changes go into effect, over time, you may see an overall decrease in ad performance and personalization and an increase in cost per action.”
As Sean Johnston reported in July, only 10% of users were opting in to track at the time. Given the choice to protect their privacy, consumers exercise it.
The losses of advertisers on other platforms turned out to be gains for Apple.
FT cited data from its mobile marketing tool branch in its reports that Apple’s search ads now drive 58% of all iPhone app downloads, up from just 17% a year ago.
Some analysts expect Apple’s advertising revenue to reach $5 billion this fiscal year, to reach $20 billion annually in just three years.
Apple’s search ads give advertisers premium real estate in the App Store, where developers, editorial stories, in-app purchases, categories and more compete for visibility. Search ads appear at the top of organic search results in 61 geographies.
According to Apple:
- 70% of App Store visitors use search to find apps.
- 65% of App Store downloads come from search.
- The average Apple search ad rate is greater than 50%.
Another analyst cited by FT estimates that marketing spending on mobile apps for both iPhone and Android phones will double year over year to exceed $118 billion in 2022.
Search in the App Store is big business for Apple. And while the brand’s commitment to consumer privacy is admirable, it’s clearly not entirely altruistic in nature.
“The technologies are part of one comprehensive system designed to help developers implement safe advertising practices and protect users — not for Apple.”
However, Apple’s advantage is now evident.
Facebook He said last month that it has “become more difficult to measure (the effectiveness of ads) campaigns on our platform” and that the impact of Apple IDFA’s retirement had a greater impact on business than expected.
As long as competitors and advertisers continue to feel the crunch while Apple leverages its privacy initiatives, we can expect the aforementioned questions to persist.
Source: financial times
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