Tue. Dec 7th, 2021

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

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

Branch, which measures the effectiveness of mobile marketing, said Apple’s in-house business is now responsible for 58 percent of all iPhone app downloads due to ad clicks. A year ago, the share was 17 per cent.

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

The app advertising market is large and growing rapidly. AppsFlyer, another analytics firm, estimates marketing costs for mobile apps for both iPhones and Android phones were $ 58 billion. In 2019 and would double to $ 118 billion. For next year.

Apple, meanwhile, is likely to make $ 5 billion. From its advertising business in the fiscal year and $ 20 billion. About a year within three years, researchers at Evercore ISI said, saying Apple’s privacy pressure had “significantly changed the landscape.”

Bar graph of differences in Apple Search Ads installations (%) showing App downloads associated with Search Ads doubled in volume

Advertising with Apple has become more attractive after the iPhone maker said users would opt out of ad tracking by default, a move that left rivals such as Facebook, Google, Snap, Yahoo and Twitter “blind”, said Grant Simmons of Kochava, a ad analysis company.

Since April, data on how users responded to ads, once in real time and in detail, is now delayed by up to 72 hours and only available overall. In contrast, Apple offers detailed information to anyone who signs up for its advertising service.

A mobile advertising manager who asked not to be named for fear of retaliation said Apple had “given itself a free pass” because it “is not subject to the same policies as all other ad networks”.

EasyPark is an app that has doubled its consumption with Apple since April. Caroline Letsjö, head of brand, said that the strategy resulted in an “all time high in ad conversion rate”, while the efficiency of reaching iPhone customers via 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 ad campaigns) on our platform” and said many companies were experiencing a “greater impact” than expected from Apple’s changes. Its shares fell 4 percent at the announcement.

Bar graph of share of total installations (%) showing Apple's privacy, pushing to limited competitors and helping its own ad network thrive

Some mobile advertisers, appalled by the lack of visibility on iPhones, are now spending more of their budget on the Android Market, said Singular, who said the spending breakdown – which was 50/50 earlier this year – expanded to 70.3 percent on Android to 29.7 percent on iPhones in late June.

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

Chris Stevens, SpotHero’s Marketing Manager, pointed to the “retargeting” tool, a service offered by Apple to let companies follow users to get back in touch 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 competitors, e.g. 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 consistent with Apple’s policies,” he said. “Despite several requests and attempts to get them to confirm that their products are in line with their own solutions, we could not get there.”

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

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