Apple's in-house ad service has grown tremendously since App Tracking Transparency

Apple's in-house ad service has grown tremendously since App Tracking Transparency
It's been more or less six months since Apple introduced new privacy features to iPhones that allowed you to prevent apps from tracking you for showing you relevant ads. Now, The Financial Times reports that this privacy change has subsequently helped Apple's own advertising business.

Apple's advertising business grew more than three times since the privacy changes

The in-house business, Search Ads, offers people sports in the App Store where they can advertise their products on iPhones. For example, if you search for Snapchat, you may see TikTok as a first result thanks to that advertising service. Now, mobile research firm Branch reports that Apple's in-house business now accounts for 58% of all iPhone app downloads that were made after clicking on an ad. A year ago this number was just 17%.

As you can see, this marks an important growth of the number of downloads on iPhones associated with ads displayed from Search Ads. Currently, the market for mobile app advertising is fast-growing and gaining importance. Analysis firm AppsFlyer estimates that spending on mobile apps, both for iPhones and Android phones was $58bn in 2019 and will be double by next year, meaning, it is expected to hit the staggering $118bn.

Meanwhile, Apple is expected to earn $5bn from its advertising business this fiscal year, and $20bn-a-year within three years, according to researchers at Evercore ISI. These researchers also said that Apple's privacy changes that prevented third-party trackers from tracking you for ads have altered the mobile app advertising landscape.

The policy changes have also made it more attractive for advertisers to advertise with Apple, according to ad analytics company Grant Simmons at Kochava. Apparently, since Apple announced ad tracking will be prevented on iPhones by default, advertising rivals such as Facebook, Google, Snap, Yahoo, or Twitter were basically left "blind" in terms of statistics. Before the new privacy changes, these apps had real-time granular data on how users responded to ads. Ever since April though, the date these advertisers receive is a 72 hour-old one and it is aggregated.

However, Apple still offers this information to advertisers running campaigns with its Search Ads service. Last month, Facebook stated it has gotten harder to measure the effectiveness of its ad campaigns.

Apple stated that its privacy changes have been put in place to protect its users and to help developers build safe advertising practices, and not to give it an advantage.

Apple's privacy changes: opt-out of ad tracking

The privacy change that Apple implemented is called App Tracking Transparency and it was released as a part of the iOS 14.5 update. What it did was basically force advertisers to ask for permission before collecting any data on iPhones. This way, iPhone users got the possibility to opt-out of having their IDFA tracking number accessed for targeted ads.

This had many companies such as Facebook react negatively as they have earned the vast majority of their revenue exactly through exploiting the tracking IDs of smartphones to deliver ads to highly specific categories of consumers. That by consequence had many advertisers focus primarily on Android devices, as many iPhone users have decided that they do not wish to be tracked for targeted ads. By now, the vast majority of iOS users have opted out of targeted advertisements.

Apparently, it's not only advertisers like Facebook that are affected by this change. A couple of months ago, we reported that the new App Tracking Transparency feature is also changing the mobile game industry and is influencing the way game makers have to go about in order to advertise in games, as they cannot be targeted to specific users.
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