Apple’s privacy changes create a boon for its own advertising business

Apple’s advertising business more than tripled its market share in the six months since the introduction of privacy changes for iPhones that prevented competitors, including Facebook, from targeting ads to consumers.

The in-house company, called Search Ads, offers sponsored placements in the App Store that appear above search results. Users who search for “Snapchat”, for example, may see TikTok as the first result on their screen.

Branch, who measures the effectiveness of mobile marketing, said that Apple’s internal activity is now responsible for 58% of all iPhone app downloads resulting from an ad click. A year ago, its share was 17%.

“It’s like Apple Search Ads has gone from minor league to World Series victory in six months,” said Alex Bauer, product marketing manager at Branch.

The application advertising market is large and growing rapidly. AppsFlyer, another analytics company, estimates that mobile app marketing spend for iPhones and Android phones was $ 58 billion in 2019 and will double to $ 118 billion by next year.

Apple, meanwhile, is expected to earn $ 5 billion from its advertising business this fiscal year, and $ 20 billion annually within three years, said researchers at Evercore ISI, who said the policy Apple’s privacy policy had “dramatically changed the landscape.”

Advertising with Apple became more appealing after the iPhone maker said users would be excluded from ad tracking by default, a move that left competitors such as Facebook, Google, Snap, Yahoo and Twitter “blind” said Grant Simmons of Kochava, an advertising analysis company.

As of April, data on how users reacted to ads, once real-time and granular, is now delayed for up to 72 hours and is only available in aggregate form. In contrast, Apple offers detailed information to anyone who signs up for its advertising service.

A mobile advertising executive, who asked not to be named for fear of reprisal, said Apple had “given itself a free pass” because it was “not subject to the same policy as everyone else. other advertising networks “.

EasyPark is an app that has doubled its spending with Apple since April. Caroline Letsjö, brand manager, said the strategy has resulted in an “unprecedented ad conversion rate”, while the effectiveness in reaching iPhone customers through Google “has suffered and therefore we have reduced our budget”.

Facebook said last month that it had “become more difficult to measure (the effectiveness of advertising campaigns) on our platform” and said many companies were experiencing a “greater impact” than expected from changes in business. Apple. Its shares fell 4% on the announcement.

Share of Total Installs (%) column chart showing Apple's privacy rivals and helped its own ad network thrive

Some mobile advertisers, dismayed by the lack of visibility on iPhones, are now spending more of their budget on the Android marketplace, said Singular, who said the spend split – which was 50/50 earlier this year. year – widened from 70.3% on Android to 29.7% on iPhones at the end of June.

The SpotHero parking app said the precision with which it was possible to focus ads on users through Apple’s advertising service contradicted the company’s rhetoric on privacy.

Chris Stevens, Marketing Director of SpotHero, pointed to the “retargeting” tool, a service offered by Apple to allow companies to track users and reconnect with them at a later date.

A search for Minecraft shows a Roblox ad, and a search for Netflix shows an Amazon Prime Video ad

Apps can advertise to users searching for their competition, for example, a search for Minecraft shows a Roblox ad and a search for Netflix shows an Amazon Prime Video ad.

“Apple could not validate for us that Apple’s solutions are in line with Apple policy,” he said. “Despite multiple requests and trying to get them to confirm that their products conform to their own solutions, we couldn’t do it. “

Apple said its privacy features are designed to protect users. “The technologies are part of a comprehensive system designed to help developers implement safe advertising practices and protect users – not to Apple’s benefit.”

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