App Tracking Transparency Helps Apple’s Ads
Last week, Apple introduced a new ad unit to the App Store: a paid placement on its Search page. Rumors of this new unit had circulated previously, although the notion that Apple would increase the density of ad placements in the App Store was wholly predictable, as I assert in this piece and this piece. Apple is expanding its mobile advertising platform in parallel with the rollout of the App Tracking Transparency (ATT) privacy policy, which presents meaningful commercial challenges to other mobile ad platforms and will likely diminish their operational efficiency.
With ATT, Apple has robbed the mob’s bank. In bolstering its ads business while severely handicapping other advertising platforms — but especially Facebook — with the introduction of a privacy policy that effectively breaks the mechanic that those platforms use to target ads, Apple has taken money from a party that is so unsympathetic that it can’t appeal to a greater authority for redress. Apple has brazenly, in broad daylight, stormed into the Bank of Facebook, looted its most precious resource, and, camouflaged under the noble cause of giving privacy controls to the consumer, fled the scene.
I guess this money is too good to pass up. But Apple pushing further into mobile advertising now — right after launching this App Tracking Transparency feature — just looks cheesy. It’s ham-fisted.
From a consumer’s perspective, there is some logic to the argument Apple is making and which is echoed by the W3C. Using only first-party data to target advertising fits with the existing business relationship a user has with a company. If I have tracking enabled, I fully expect Apple to use my App Store purchase history to show me ads for other apps. If I use one of Facebook’s apps, I will not be surprised if it uses the accounts I follow and things I search to inform the advertising it shows me. But if I launch some other third-party app, I only know that some undisclosed SDK will inform the ads Facebook and Google show me elsewhere because I am in this industry and I write this website. It’s the same thing for ad tracking across the web.
But if platform owners get to claim that the activity that occurs in their own apps and third-party apps that are required to use a specific payment mechanism, that gives them a diabolical first-party advantage.
Apple’s rule for other developers: you have to ask users if they want to be “tracked” for ad targeting
But Apple’s own ad tracking is “personalization,” which sounds much less nefarious
You can absolutely implement on-device ad personalization the way Apple does, and Apple will not require you to pop up the App Tracking Transparency consent dialog for that
You can implement it the way Apple does by only using your own data, but you won’t get the results that Apple does because it gets extra data by virtue of being the platform owner and exclusive app distributor.
Classic Apple dark pattern! Compare the primary action for Apple’s ad tracking prompt vs the App Tracking Transparency modal, pictured above
The Financial Times reports that because Apple’s own search ads effectively let developers target users by interests, it became much more appealing once ATT rules came into force.
Apple’s advertising business has more than tripled its market share in the six months after it introduced privacy changes to iPhones that obstructed rivals, including Facebook, from targeting ads at consumers.
[…]
Branch, which measures the effectiveness of mobile marketing, said Apple’s in house business is now responsible for 58 per cent of all iPhone app downloads that result from clicking on an advert. A year ago, its share was 17 per cent.
[…]
That is set to see Apple’s ad business revenue climb from $5B this year to $20B/year within three years, estimated one research group.
[…]
Media analyst Eric Seufert has previously made the same point – that Apple’s ad business does give itself privileges unavailable to competitors. However, he said the analysis behind the FT piece may overstate the position, for several reasons[…]
What has made Search Ads suddenly attractive is not any new feature but the fact that Apple has rendered the rest of the ad industry “blind” in the iOS universe, says @kochavaofficial, whose own data has Search Ads up 69% since June, while rivals are down 43%(!) on average.
Last year, I attended a hearing where Apple and its lawyers swore that its privacy changes were not in any way motivated by a desire to grow its advertising activities, which would remain totally marginal.
Previously:
- App Tracking Transparency Doesn’t Stop Trackers
- App Tracking Transparency Affecting Facebook
- Does Apple News Track You?
- iOS 14.5 and iPadOS 14.5
- More App Store Search Ads
Update (2021-10-21): Dare Obasanjo (via Dan Grover):
Every social app will eventually become a shopping app, even Twitter. As Apple has killed the ability to track ad effectiveness outside apps via ATT, the industry reaction is to bring all commercial activity within apps.
Update (2021-10-28): Sami Fathi (Hacker News):
Apple’s privacy rules are “negatively affecting” Facebook, and its business, Facebook CEO Mark Zuckerberg claimed during its most recent earnings call.
Update (2021-10-29): Nick Heer:
I truly believe Apple had good intentions with App Tracking Transparency, and I fully buy its premise. But it is shaping up to be a letdown on both sides of advertising. Apps are not respecting users’ choices and tracking them anyway, while Apple is — at the very least — appearing to behave anticompetitively by restricting what is available to third-party advertisers while expanding its own ads business.
Update (2021-11-12): Dave Mark:
This just popped up in Apple News.
Turn on Personalized Ads? Nah, no thanks.
In this article, I’ll make the case that ATT advantages Apple’s own ad network, and I’ll propose remedies that would bring the applicability of ATT to parity across Apple’s ad network and the broader advertising ecosystem. Note that Apple’s documentation for its ads platform and privacy controls is vague in places, and the logic it uses to power certain protocols is non-public. I attempt in this article to document all claims with authoritative resources, but in some cases that is not possible and I rely on direct experience and anecdotes.
1 Comment RSS · Twitter
> the industry reaction is to bring all commercial activity within apps.
This is an incredibly important point. It allows Apple to claim with a straight face that their advertising activities are not intended to grow - because they clearly don't have to. If they push commercial activity from the open web into proprietary apps, it grows their "commission" revenues for digital products. I can't decide if it's a brilliant strategic move or a dangerous attack on electronic commerce.
