Apple’s ATT power play: the hard truths of throttled competition and concentrated leverage

By Seb Joseph

Everyone becomes what they hate sooner or later. Of course, they might not become everything they hate, but they become the thing that they focus on the most.

For Apple, that thing is a walled garden. The company has spent years criticizing other online platforms for monopolizing people’s data in the pursuit of media dollars. And yet, that very same criticism is now being levied at it.

Critics argue that Apple’s App Tracking Transparency (ATT) plan is a smokescreen to expand its ads business under the cover of privacy. Otherwise, goes the thinking, the company would have gone about protecting people’s privacy in a very different way. With ATT now out in the wild, though, it won’t be too long before it all shakes out.

Until then, here’s a breakdown of why those critics may have a point.

Start with the most recent tell: just days before ATT arrived the Financial Times reported that Apple is giving itself more inventory to sell. In particular, a second ad slot in the “suggested apps” section in the App Store search page will be available to buy next month.

Now, this isn’t much of an issue if Apple is working to the same rules as everyone else — but it’s not. Ads bought from the Apple Search Ads business are not subject to the same blunt attribution on offer in the SKADNetwork where in-app ads are measured. Instead, search ads are put through the Apple Ads Attribution API, which gives marketers a more complete view of how they performed.

In other words, search ads bought directly from Apple are potentially easier to optimize than those in-app ads on other platforms. Marketers are likely to shift their dollars accordingly.

“Apple’s search ads are highly adopted among our clients, with around 80% of them running those campaigns,” said Shumel Lais, CEO of mobile advertising intelligence business Appsumer. “The issue is that its share of wallet is low so there’s room for growth.”

Apple’s wins don’t stop there though.

Intentional or not, ATT will cripple mobile advertising on the App Store. Here are just a few examples: bereft of the sharp tracking of performance campaigns, marketers will be willing to pay less for ads and publisher revenues will drop: measurement firms will find it hard to grow if there are fewer ads to track: ad tech vendors will struggle to find enough users who are likely to install an app or click an ad.

From Apple’s perspective, however, the future looks a lot brighter.

Ads are a key way to discover apps so fewer of them means people are more likely to spend longer browsing Apple’s App Store. So not only would Apple’s search business look more attractive to marketers because it has granular data, but it would also have potentially more impressions due to more people searching through the App Store for apps.

“The ATT announcement is not a huge addition to Apple’s ad program in terms of expected revenue plus in-store app marketing is a …read more

Source:: Digiday