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In context: Facebook predicted that there would be an "adocalypse" after Apple began enforcing its App Tracking Transparency earlier this year. I don't know if that's actually been the case since ad-supported apps still pound me with advertisements that seem no different than before. However, one analyst firm says Apple has greatly benefitted from the new ATT rules.
Apple's on-device advertising platform, Search Ads, reserves spots at the top of App Store queries for developers to advertise their apps in relevant search results. For example, when searching for Telegram, a user may encounter a paid Twitter banner at the top of the results page (below).
The Financial Times notes that data from mobile marketing analysis firm Branch indicates Apple's mobile advertising market share has tripled over the last year. Search Ads only held a measly 17 percent of the iPhone advertising market a year ago. As of last month, it commands a majority share of 58 percent, with most of that growth coming in the previous six months.
"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.
Analyst group Evercore ISI predicts that Apple's advertising platform is likely to clear $5 billion in fiscal year 2021. Researchers see growth over the next three years, reaching $20 billion annually.
"[Apple's privacy push] significantly altered the landscape," Evercore reported.
Apple began requiring developers to ask users for permission to gather and use their data for ad targeting earlier this year, after a nearly four month delay. As expected, many users have opted out of tracking on most apps. As a result, Facebook's "Audience Network" and Google Ads were severely hobbled when users began denying permissions to track.
The Financial Times suggests that this mass exodus is what led to Apple's ballooning advertising growth. However, this might be a bit overstated. For one, Apple's Search Ads platform is an exclusive feature of the App Store and does not engage in first-party advertising within its apps.
Additionally, analyst Eric Seufert points out that the data Branch used in its analysis excludes gaming apps, a dominant subsector of the broader app market. He mentions that Branch only looked at "mobile app install ads spending and not mobile web ads spending," which further skews the analysis. Also, the actual values used in the study are unknown.
"This data is presented as a percentage of total attributed installs," Seufert said. "Given that these figures are percentages and not absolute values, the total market size of iOS installs is a relevant consideration which is omitted here, ie. if the total market shrank, Apple's increased share might not be indicative of increased revenue or scale."
Seufert said that without solid numbers, it is hard to put the study into context. In other words, Apple's advertising growth came at least in part because of an overall market shrinkage caused by the new transparency rules.
Indeed, several mobile advertisers have adjusted their advertising budgets in favor of the Android platform. Analysts at Singular say that advertising between Android and iPhone markets was split nearly 50/50 toward the beginning of 2021. As of June, advertising dollars spent now favor Android 70.3 percent to 29.7 percent.
So, it is hard to determine how much of Search Ads tripling go market share was actual growth without knowing the absolute values used to calculate those percentages.