Apple Search Ads grows during App Tracking Transparency push

Apple's in-house advertising arm, Search Ads, appears to be benefiting from Apple's privacy push in 2021, with the business growing in market share at a time when rival advertising firms are having trouble targeting advertising at potential customers.

Apple's introduction of App Tracking Transparency has certainly impacted the advertising business, prompting an immediate drop in revenue for an industry that relied on tracking ad viewers between apps and websites. Months later, it appears that the changes have been beneficial to Apple's bottom line.

According to mobile marketing analysts speaking to the Financial Times, Apple's Search Ads have seen a dramatic rise in usage, becoming responsible for 58% of all iPhone app downloads, versus 17% one year ago. In terms of revenue, it is reckoned Apple could earn $5 billion from advertising in 2021, rising to $20 billion a year within three years.

"It's like Apple Search Ads has gone from playing in the minor leagues to winning the World Series in the span of half a year," said Branch product marketing head Alex Bauer. Meanwhile, researchers at Evercore ISI say Apple's privacy initiatives have "significantly altered the landscape" of online advertising.

It is thought that Apple's ATT program that opted users out from online advertising left rival firms operating "blind," said ad analytics firm Kochava's Grant Simmons. While ad firms are stuck with a 72-hour delay on ad data, which is also provided only in aggregate form, Apple's own advertising service is said to offer a greater level of detail.

This disparity led to one unnamed mobile advertising executive to claim Apple had "given itself a free pass" since it's "not subject to the same policy that every other ad network is."

Furthermore, there is the claim by SpotHero chief marketing officer Chris Stevens that the advertising system's ability to focus ads on users didn't correlate with Apple's privacy rhetoric, such as the "retargeting" tool used to let companies follow users for future re-engagement.

Apple was also "unable to validate" that its system complies with Apple's own policy, Stevens added. "Despite multiple requests and trying to get them to confirm that their products are compliant with their own solutions, we are unable to get there."

In a statement to the report, Apple insisted its privacy features were aimed at protecting users. The technologies are part of one comprehensive system designed to help developers implement safe advertising practices and protect users - not to advantage Apple," the company said.