Apple’s Digital Ad Business Gains An Edge Over Google and Facebook

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CNBC reports that Apple’s digital advertising is gaining momentum and can threaten the Google-Facebook advertising duopoly.

The introduction of the App Tracking Transparency (ATT) feature on iOS devices gives Apple an edge over other ad platforms.

Industry leaders suggest that digital advertising might become a “triopoly” if Apple continues this momentum.

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Although there are many players in the Digital advertising space, Google and Facebook have shared market dominance for a long time. However, new research by CNBC suggests that Apple may be taking the lead in the digital ad business. 

App Tracking Transparency (ATT) Gives Apple a Significant Advantage 

Apple’s newfound success in advertising is largely attributed to the controversial iOS privacy update from 2021, which added an app tracking transparency (ATT) feature. The feature allows iPhone users to deny access to their user data. 

Meta, Snap, and other companies specializing in targeted digital advertisements have experienced significant blows to their ad model since the introduction of ATT. All the while, Apple search ads have grown by nearly 4% since the adoption of the feature. 

Shumel Lais, GM at Appsumer, attributes Apple’s momentum to the native nature of its ad placement and unique attribution approach that gave them an edge when ATT was introduced. 

Apple Might Be Building Ad-Centric Products

As of now, Apple is primarily a technology company and only has one ad product, Apple Search Ads, which displays advertisements on the App Store. 

However, recent news indicates that Apple may be looking to expand into the advertisement space and build new ad products. Apple is looking to hire digital ad-tech leaders and possibly double its advertisement team. 

Spectators have even suspected that Apple may work on a demand-side platform (DSP). Regardless, as of now, Apple has not confirmed any such plan. 

On the other hand, the concept of Apple creating its ad-centric products has been scrutinized, with consumer privacy issues being a major point of contention. With that said, it’s unclear what consumer privacy issues might entail, as the new ad products are still unknown. 

Where Are Digital Ads Heading?

As a whole, The digital marketing industry has been struggling with revenue decline, likely due to the declining global economy. Unfortunately, these trends are likely to continue for the foreseeable future. 

Google and YouTube’s parent company, Alphabet, has experienced a drop in shares by 25%. Meta Inc, which owns Facebook, has dropped 52% year-to-date. Snap Inc. had a particularly bad 75% dip since January. Even Apple has experienced a drop of 14% year-to-date. 

Considering the tough economic state of the ad industry and Apple’s leg up on the competition, it’s safe to estimate that Apple might play a larger role in the advertisement industry moving forward. 

Lais told Yahoo News he doesn’t believe the Google-Facebook duopoly will end. Rather, we may end up with a triopoly with Apple as the third leader in the digital ad space. 

Source: Yahoo News