Apple's privacy changes have provided a windfall for its own advertising business
Apple's advertising business has more than tripled its market share in six months after privacy changes to the iPhone prevented rivals including Facebook from targeting consumers with ads.
The company's internal business, called search advertising, offers sponsored slots above search results in the app store. For example, when a user searches for Snapchat, the first result on the screen might be TikTok.
According to Branch, which measures the effectiveness of mobile marketing, Apple's internal business now accounts for 58 percent of all iPhone app downloads generated by clicking on ads. A year ago, its market share was 17 percent.
Alex Bauer, head of product marketing at Branch, said: "It's like Apple search ads going from little leaguers to world Series champions in just six months."
The app advertising market is huge and growing fast.AppsFlyer, another analytics firm, estimates that mobile app marketing spending on iPhones and Android phones was $58bn in 2019 and will double to $118bn by next year.
Researchers at Evercore ISI, meanwhile, say Apple could earn $5 billion from advertising this fiscal year and $20 billion annually over three years. They said Apple's push for privacy had "dramatically changed the landscape".
Grant Simmons, of Kochava, an advertising analysis company, said the partnership became more attractive after Apple said users would opt out of AD tracking by default. The move left rivals such as Facebook, Google, Snap, Yahoo, and Twitter "blind".Since April, data on how users respond to ads, once real-time and fine-grained, has been delayed by as much as 72 hours and is available only in aggregate. Apple, by contrast, provides details to anyone who signs up for its advertising services. One mobile advertising executive, who asked not to be named for fear of reprisals, said Apple had "given itself a free pass" because it was "not subject to the same policies as every other advertising network".EasyPark has doubled its investment in Apple since April. Carolyn Letsjo, head of the company's brand, says the strategy has resulted in "the highest conversion rates in history" and the efficiency of reaching iPhone users through Google "has suffered, so we've cut our budget".Facebook said last month it was "increasingly difficult to measure the effectiveness of [advertising] campaigns on our platform" and said Apple's changes had had a "bigger impact" on many businesses than expected. Shares in the company fell 4 percent after the announcement.
Some mobile advertisers, struggling with a lack of visibility on the iPhone, are now spending more of their budgets on the Android market, with singular representation and split spending -- a 50/50 expansion to 70.3% earlier this year, compared with 29.7% for Android on the iPhone at the end of June.SpotHero, a parking app, said that focusing ads on user accuracy through Apple's AD service was at odds with its rhetoric on privacy. Chris Stevens, chief marketing officer of SpotHero, pointed to "retargeting" tools, a service offered by Apple that allows companies that care about users to reconnect with them in the future.
"Apple has not been able to prove to us that Apple's solutions are consistent with Apple's policies," he said."Despite repeated requests and attempts to get them to confirm that their product fits their solution, we were unable to do so."Apple says its privacy features are designed to protect users."These technologies are part of a comprehensive system designed to help developers implement safe advertising practices that protect users, not for Apple's benefit.