Apple-funded study claims App Store Search ads business doesn’t benefit from App Tracking Transparency rules

By: Anry Sergeev | 26.04.2022, 22:10
Apple-funded study claims App Store Search ads business doesn’t benefit from App Tracking Transparency rules

A new study funded by Apple and released today aims to show the impact that App Tracking Transparency has had on the mobile advertising industry. The study claims that App Tracking Transparency has not benefited Apple’s own advertising business, and “Apple offers greater privacy options in its own apps than is required under ATT.”

The study, funded by Apple, was conducted by Kinshuk Jerath, Ph.D. from Columbia Business School. Jerath is a professor in Columbia’s Marketing Division.

It appears that this study was again funded by Apple to clear up some myths about App Tracking Transparency’s impact. For instance, Apple argues that its own first-party Search Ads business “grew for a variety of reasons unrelated” to App Tracking Transparency.

This is to refute allegations that developers were made to pay more for App Store Search Ads in order to combat third-party advertising being less effective because of App Tracking Transparency policies.

The study also says that “that Apple captured billions of advertising dollars from other companies as a result of ATT to lack supporting evidence.” This comes as companies such as Facebook and Snap have blamed App Tracking Transparency for impacting advertising revenue and user growth

If ATT led to significant revenue losses for prominent advertising platforms it’s unlikely that Apple is the sign-ificant beneficiary. And if the vast majority of the revenue lost would be likely diverted to Apple’s competitors, it calls into question the notion that Apple introduced ATT to benefit its ads business.

The study explains that it is highly unlikely that App Tracking Transparency has served as a “windfall” for Apple’s own advertising business at the cost of revenue for companies like Facebook and Snap.

Some observers have pointed to the growth in Apple Search Ads that coincides with the launch of ATT in 2021 as evidence that Apple introduced ATT to benefit its own ads business. However, there are other explanations for growth in Apple Search Ads unrelated to ATT.

First, Apple Search Ads is a relatively new service that was growing even prior to the introduction of ATT. It launched in 2016, and revenues are estimated by industry analysts to have grown into the low single-digit billions. The cost per “tap” on a mobile ad is also estimated to have grown over time, suggesting that advertisers value Apple Search Ads. I have seen no evidence to believe these trends would not suggest further growth in 2021 and beyond, growth which would have occurred even without the introduction of ATT.

Second, general industry trends and other decisions made by Apple may have contributed to the growth of Apple Search Ads in 2021: Continued overall growth of mobile ads and app install ads, growth of ads in certain app categories, and the launch of Apple Search Ads in China.

9to5Mac’s Take

This study that Apple published today was unsurprisingly self-serving. It is similar to previous studies regarding the App Store. Apple’s argument this time appears to be that App Tracking Transparency does not impact the ability for other companies to use first-party data. App Tracking Transparency is only applicable to third-party information.

The study shows that Apple’s Search Ads division is only a small percentage of global mobile advertising and has not seen any “significant benefits” from App Tracking Transparency.

There were three reasons Apple funded this study. The company clearly wants to challenge the narratives of companies such as Facebook. On multiple occasions, Facebook has said that App Tracking Transparency impacts small businesses more than anyone else. The study argues that ATT allows user targeting with improved privacy controls, but that such claims may be “speculative.”

Second, there’s an obvious antitrust angle here too. The App Store Search Ads company has been under increasing scrutiny as Apple is facing antitrust pressure all over the globe. The study (which does not contain any data solid) attempts to prove that App Tracking Transparency has helped the App Store search ads.

Finally, and similar to my second point, Apple repeatedly notes that its own applications offer “greater privacy options than is required under ATT.” This fact alone, Apple says, should “call into question the notion that Apple introduced ATT to benefit its ads business.”

Take this study with a grain of salt, but it’s at least worth checking out. The full study, funded by Apple, can be found on the company’s website right here.

Source: 9to5mac.com