Apple could see a multibillion-dollar lift to its advertising business from its adoption of App Tracking Transparency which offers users control of tracking on Macs, iPhones, iPads, and Apple TVs, according to Bernstein analyst Toni Sacconaghi.
Sacconaghi said in a research note Thursday [that] Apple launched new app-tracking limitations in April for iOS devices, reducing the ability of platforms like Facebook and Snap to target ads at consumers based on their visits to other apps and websites. Sacconaghi said that about 80% of iOS users have opted out of being tracked, and both Facebook and Snap reported significant hits to their September quarter earnings from the changes.
Sacconaghi said that while the changes were likely mainly intended to protect users’ privacy, they seem to have clearly helped Apple’s advertising business. That, he said, is “largely unappreciated and could ultimately reinforce the bull narrative of high-margin services growth.”
Sacconaghi estimates that Apple’s ad business today is about $4 billion, or about 60% of the app search ad market on iOS. He said Apple is likely to benefit from any shift of ad dollars from display ads on other platforms to search ads within the Apple App Store, but sees the opportunity as modest… Sacconaghi said a bigger opportunity would be for Apple to start placing ads on other companies’ apps. That would put the company in competition with Facebook, Google and other ad platforms, but he sees risks to that strategy. “Apple could potentially do so using differential privacy, though the appearance of becoming a major ad player while espousing privacy and competing directly with Google (who pays Apple an estimated $15 billion a year to be the default search engine on iOS) may be potential impediments,” he wrote.
MacDailyNews Take: Again, users should have full control of whether they are tracked across apps or, for that matter, tracked at all.
Privacy means people know what they’re signing up for, in plain English, and repeatedly. I’m an optimist; I believe people are smart, and some people want to share more data than other people do. Ask them. Ask them every time. Make them tell you to stop asking them if they get tired of your asking them. Let them know precisely what you’re going to do with your data. — Steve Jobs
If doing business the right way happens to help Apple (and Apple-focused news sites), since advertisers very much desire ways to connect with Apple device users, so be it.
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