Tracking updates can net Apple’s billions in search advertising revenue.

The privacy changes that came with the iOS 14 rollout earlier this year have helped Apple gain huge gains in search advertising market share, iPhone app downloads and revenue. Financial Times. Reports

Its app-tracking transparency initiative has been a good business move for Apple, as the brand’s advertising business has shown that its market share tripled in the six months since the update.

This was not great news for everyone.

Eliminating the Identifier for Advertisers (IDFA), a random device identifier Apple assigned to user devices, severely affected advertisers’ ability to deliver personalized ads on other platforms. What is it.

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Consumer Acquisition CEO Brian Bowman said. Venture beat. In July, advertisers saw a 15-20% drop in revenue, with some losing up to 40%.

In a statement last year, Apple explained its motives for adding opt-in prompts for tracking targeted advertising:

“We believe that technology should protect consumers’ fundamental right to privacy, and that means providing users with tools to understand which apps and websites are used for advertising or other advertising measurement purposes.” Is sharing its data with companies, as well as tracking tools for revoking permission. “

However, this commitment to privacy comes at a price that has angered many – perhaps no more than Facebook.

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Facebook warned its advertisers that Apple’s change could “significantly limit your marketing efforts” and “harm the growth of small businesses and the free Internet.”

Facebook said in a statement:

Apple’s proposed changes will limit your ability to effectively reach, understand and engage with people on mobile devices and the web.

It will affect your ability to understand performance, who sees your ads, and to make informed decisions about your advertising budget.

As these changes take effect, over time, you may notice an overall decrease in ad performance and personalization, and an increase in cost per action.

As Sean Johnston reported in July, only 10% of users were opting for tracking at the time. Considering the privacy protection option, users are using it.

And the disadvantages of advertising on other platforms are proving to be the advantages of Apple.

Apple Search Ads now drives 58 percent of all iPhone app downloads, up from 17 percent a year ago, according to data from the Mobile Marketing Tools Branch.

Some analysts predict that Apple’s advertising revenue will reach 5 5 billion this fiscal year, up from 20 20 billion a year in just three years.

Apple’s search ads give advertisers prime real estate in the App Store, where developers can view editorial stories, in-app purchases, categories, and more. Search ads appear in the top 61 organic search results.

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According to Apple:

  • 70% of App Store visitors use search to find apps.
  • Of all the apps in the App Store, 65 are below search.
  • The average rate of Apple search ads is over 50%.

Another FT analyst estimates that marketing costs for mobile apps for both the iPhone and Android phones will double year on year and exceed 8 118 billion in 2022.

Searching the App Store is big business for Apple. And while the brand’s commitment to consumer privacy is commendable, it is obviously not entirely prudent in nature.

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The brand has said:

“Technologies are part of a comprehensive system designed to allow developers to implement secure advertising practices and protect consumers – not to the advantage of Apple.”

However, the benefit to Apple is now clear.

Facebook said last month that “it has become difficult to measure campaigns (ad effectiveness) on our platform” and that Apple’s IDFA retirement business has been affected more than expected.

As long as competitors and advertisers continue to notice this reduction while Apple continues to benefit from its privacy measures, we can expect the noted questions to continue.


Source: Financial Times

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Featured image: sdecoret / Shutterstock

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