Apple’s Privacy Changes Have Strengthened Its Advertising Business
Published · Oct 19, 2021
Apple’s advertising business has more than tripled its market share following the introduction of privacy changes on iPhones. The changes hinder rival companies such as Facebook from targeting consumers with adverts. It also provides benefits that third parties lack.
Search Ads, which is the name of Apple’s platform, offers sponsored slots. This allows apps to appear above competitors in App Store searches. Search Ads is now responsible for 58% of all iPhone app downloads from ad clicks. In the same period last year, it accounted for just 17%.
The advertising market is massive. According to The Financial Times, market spending on mobile ads was $58 billion in 2019. Predictions are that Apple will earn $5 billion in 2021 from its adverts business and reach $118 billion in 2022.
Experts agree that Apple’s “privacy shift” has changed the landscape. iPhone users, all one billion of them, are now automatically opted out of advertising tracking by third parties, such as Facebook, Twitter, and Google.
This in itself is positive because it means fewer users have their personal data gathered. Publicly available data is often used in people search sites and background check services. However, advertising data is a lot more invasive in nature, tracking users’ locations, habits, and so on.
Unfortunately for the privacy-conscious, Apple itself has upped its advertising abilities. The company offers better quality data to those who sign up for Search Ads. The information its competitors offer is more limited, delayed by 72 hours, and only available in aggregate.
In a twist, Apple’s ability to target users is even stronger since it implemented its new “privacy focus.” It appears that the shift has boosted Apple’s capabilities while weakening the ability of other platforms to compete with it.
Because of this, rivals have begun shifting their focus to Android, which comprises roughly 72% of the smartphone market. Apple maintains that the privacy shift is to the benefit of users, despite accusations of capitalization and anti-competitive behavior.
Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.