The New iPhone Feature Has Made Mobile Advertising Expensive!

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When Apple introduced iOS 14.5 with a crucial new feature in April this year, people have had little idea how colossal the impact is going to be on the advertisers and publishers worldwide. As the adoption of iOS 14.5 has reached a significant level now, advertisers are left with no other option but to ditch iPhone.

Apple’s App Tracking Transparency (ATT) feature has not just affected digital advertisers behemoths Facebook and Google, but millions of brands and organisations that are now bound to ditch iOS and spend more digital advertising dollars on Android, a new report highlights.

Privacy is important for Apple, and when it comes to personal information the Cupertino giant believes that control must be with users as much as possible. But the move appears to be affecting the global advertising landscape.

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Advertisers Ditching Apple: Big Picture

  • Apple announced a privacy-first feature, App Tracking Transparency, for iPhone and iPad users with the release of iOS 14.5.
  • Apps that rely on targeted advertising dollars face a huge blow as they have to seek permission from every individual iPhone user for tracking their activities. Undoubtedly, no one wants to be tracked!
  • Due to Apple’s App Tracking Transparency, advertisers have started shifting their focus from iOS to Android.
  • Over 70% of iPhone are already upgraded to iOS 14.5 now. It means that all those users will see tracking prompts from every app that tries to serve targeted ads to those users.
  • According to Flurry, another mobile app research firm, only 25% of iPhone users who see such tracking prompts allow apps to track their data. 
  • As result, the advertising spends on iOS devices fell by about a third in June, according to mobile ad measurement company Tenjin.
  • Advertisers have started channelising their ad dollars towards Android as the ad spends on Android increased by 10% during the month of June.
  • The data coming from digital advertising agencies don’t paint a different picture either. Clients that were spending on ad campaigns designed for iOS apps have mandated their agencies to shift the focus on Android apps now
  • Tunuiti, a digital marketing agency, has revealed that its clients who are spending on Facebook ads are willing to spend more on Android than iOS. The YoY growth in advertising spends on iOS went down to 25% in June from 42% in May. In contrast, ad spent growth on Android increased to 64% in June from 46% in the previous month, as reported by the agency.
  • Until now advertisers tend to spend more on iOS as iPhone users are considered as ‘high-value target’ than those on Android.

Food For Thought

Both Facebook and Google are quite concerned about the changing dynamics in the digital advertising space. And why not; advertising accounts for over two-thirds of their yearly revenue. In fact, Mark Zuckerberg has been quite vocal in criticising Apple’s new feature as nearly 99% of the social media giant’s revenue comes from ads. 

Despite enjoying a smaller users base than Google’s Android users, Apple takes the biggest share of the global app advertising revenue every quarter. The deep pocket that every iPhone user has is not hidden from any advertiser, and that’s the reason advertisers didn’t leave any stone unturned to tap iOS users by tracking their preferences and interest. 

All of that is changing now, and the new dynamics will have a direct impact on the global digital advertising market. How the situation will eventually pan out only time will tell but given the current stand of Apple, brands and advertisers must be ready to pay considerably higher CPC and CPM in the days to come.

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