Last week, Apple announced that it will add two new advertising placements to the App Store: a featured placement on the App Store’s Today page, which is the first content visible when the App Store is opened, and a sponsored placement on individual App Store product pages in a new content section labeled with “You Might Also Like.” Both of these placements will be clearly marked as ads, and both will be exclusively serviced by Apple’s own Apple Search Ads platform.
Back in May 2021, one month after Apple rolled out its App Tracking Transparency (ATT) privacy framework through iOS 14.5, Apple similarly introduced a new advertising placement in search results. I characterized this commercial maneuver in the wake of ATT as akin to robbing the mob: Apple handicapped the performance of app advertising on display networks and then immediately expanded its own advertising business through proprietary ownership of the App Store and privileged access to user engagement and monetization data (advantages which I unpack here). From Apple robbed the mob’s bank:
And Apple might only just be starting along that path. A search for ‘ad platforms’ on the Apple careers portal yields nearly 200 results. Could an in-app display network, available for use by independent app publishers, be on the horizon?
Apple may have shifted some revenue from other ad platforms to its own with ATT, but it also destroyed considerable value by letting ad spend evaporate that it can’t possibly absorb, all in the name of consumer privacy. I call this Pyrrhic Privacy: the use of outdated, inadequate, and unnecessary (this is a critical qualifier!) restrictions on context such that privacy protection is gauged only by the magnitude of value obliteration rather than through actual consumer harm reduction (see: SKAdNetwork versus Apple’s own, internal measurement framework). From the piece:
These legal and commercial constructions of privacy sublimate the obstruction of ads personalization into a sort of moral emancipation that very purposefully ignores the benefits of personalized advertising to consumers. But draconian measures like these aren’t necessary to safeguard consumer privacy: the gangrene can be treated, and the limb can be saved.
Note that Apple’s ad network utilizes app install and in-app purchase data, to which Apple has exclusive first-party access under the restrictions of ATT, to target ads to users with its ad network. It’s worth underscoring that, with ATT, the scope and substance of consumer data utilized to target ads remains unchanged, except that only Apple has access to it. To be fair: Apple does employ privacy controls with its own ad network that are superior to the pre-ATT status quo. But my primary contention with ATT is that it does not facilitate real consumer choice and that it deprives consumers of widespread ad relevancy and advertisers and publishers of commercial opportunity.
Theoretically, if Apple could scale its ad network to replace the value that was incinerated with ATT, would consumers care about the competitive issues inherent with ATT? Would advertisers and publishers? Or would they be indifferent?