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 serves as a professor of business in Columbia’s Marketing Division.
It seems that the primary goal of this new study, which again was funded by Apple, is to dispel some of the narratives that have circulated about the impact of App Tracking Transparency. 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 a refutation of allegations that some developers were forced to spend more on App Store Search Ads to counteract third-party app install advertising becoming less effective due to 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 did lead to a massive revenue reduction for a number of prominent advertising platforms, it is unlikely that Apple would be the sig- nificant 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.
This study published by Apple today is unsurprisingly self-serving for the company, similar to other studies we’ve seen in regards to 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. Instead, App Tracking Transparency applies only to third-party data.
The study also indicates that Apple’s Search Ads business is a “small percentage of world-wide mobile advertising” and is unlikely to have “significantly benefitted” from App Tracking Transparency.
There are three clear reasons for Apple’s funding of this study. First, the company is clearly attempting to counteract narratives from companies like Facebook. On multiple occasions, Facebook has said that App Tracking Transparency impacts small businesses more than anyone else. This study’s argument is that ATT still allows for user targeting, just with better privacy controls in place, and that any such claims are “speculative.”
Second, there’s an obvious antitrust angle here too. As Apple faces mounting antitrust pressure around the world, the App Store Search Ads business has become an increasingly big target of scrutiny. This study attempts (without any solid data) to dispel that the App Store Search Ads has benefited from App Tracking Transparency.
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.
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