Apple’s carefully cultivated image of a privacy-oriented member of Big Tech has taken several hits lately, with the outcome of the privacy changes introduced half a year ago around advertising in the App Store now under scrutiny.
Apple said the goal of the changes – that keep ad tracking competitors like Facebook, Google, Twitter and others out by default and introduce the company’s own solution, Search Ads – was to benefit and protect its users, and allow developers to use “safe” ad practices.
But the result has been the soaring of Apple’s profits, which went from 17 percent a year ago to 58 percent now, when it comes to app downloads resulting from users clicking on ads. And some app developers are finding it difficult to reconcile the privacy narrative with the sheer efficiency of Apple’s ad targeting.
The chief marketing officer for one of them, SpotHero, said that Apple also provides something called a retargeting tool that makes it possible to track users and engage with them again later, the Financial Times writes.
A mobile advertising executive, who spoke on condition of anonymity, accused Apple of giving itself “a free pass” since it is “not subject to the same policy that every other ad network is.”
Search Ads works by reserving sponsored space above the actual app search results for companies paying for their ads to be displayed there. This means that if they decide to target competition, their app will appear at the top of the page when users search for that competitor. For that reason, it can happen that the first thing users searching for Snapchat in the App store see is TikTok, while a Netflix search can put an Amazon Prime ad in the reserved slot above other search results.
This is working well for Apple, who have tripled their ad revenue since the “privacy” changes have been introduced, while firms analyzing the market like Evercore ISI expect the giant to rake in $5 from ads this year, with the figure rising to $20 billion a year by 2024.
The huge advertising market for iPhones and Android devices is at the same time expected to reach $118 billion by 2022, from $58 billion in 2019.
