Apple’s Ad Business Surges After New Privacy Changes on Rivals: Report

According to a report from the Financial Times, the market share of Apple’s app advertising business, ‘Search Ads’, has grown threefold in the six months following the introduction of the company’s ‘AppTrackingTransparency’ framework.

The AppTrackingTransparency framework is designed to prevent competitors like Facebook, Google, and Yahoo from tracking iPhone users across apps and targeting ads at them, but doesn’t apply to Apple’s own advertisement business or practices.

Search Ads sells sponsored spots in the App Store’s search results, allowing customers to market their apps to their target audience with (now) unparalleled precision.

According to Branch, a firm that analyzes the effectiveness of mobile marketing, Apple’s Search Ads now accounts for 58% of all iPhone app downloads from clicks on advertisements, as opposed to just 17% this time last year.

“It’s like Apple Search Ads has gone from playing in the minor leagues to winning the World Series in the span of half a year,” said Alex Bauer, head of product marketing at Branch.

Search Ads is primed to bring in $5 billion USD from ad revenue this fiscal year, and experts suggest that number could go all the way up to $20 billion USD per year within the next three years.

According to researchers at Evercore ISI, Apple’s privacy and anti-tracking measures have “significantly altered the landscape.”

With the introduction of the AppTrackingTransparency framework and accompanying changes, Apple’s competitors have been rendered largely ineffective at targeting ads even though they’re still collecting user data.

Since April of this year, competing advertisers have to wait up to 72 hours to determine how users are collectively responding to ads, data that was previously available in real-time on a per-user basis.

Apple, however, is not subject to these same limitations and offers detailed analytics to clients of its ads service, along with targeting precision that is not only near impossible for rivals but also clashes with the company’s own stance on user privacy.

Apple’s ‘the safest hands are still our own’ approach to targeted advertisements has resulted in a lot more mobile advertisers signing up for Search Ads, and many even shifting more of their budget from advertising on iOS to advertising on Android.

Alarmingly, Apple isn’t even making any effort with Search Ads clients to justify its targeting practices or demonstrate that they comply with their own advertising policies.

“Apple was unable to validate for us that Apple’s solutions are compliant with Apple’s policy,” said Chris Stevens, chief marketing officer for SpotHero. “Despite multiple requests and trying to get them to confirm that their products are compliant with their own solutions, we were unable to get there.”

All Apple has done so far is say that its privacy features are intended to protect users. “The technologies are part of one comprehensive system designed to help developers implement safe advertising practices and protect users — not to advantage Apple.”