Why Apple's digital ad business is gaining an edge over Google and Facebook

Apple (AAPL) is gaining ground across the digital ads landscape, challenging Google and Facebook's longtime dominance of the space, according to new research published by InMobi’s Appsumer.

The research, which CNBC has reported on, suggests that Apple's ads business has thrived after the company's much-discussed iOS privacy update last year undercut the user-tracking efforts of app developers. That update — called App Tracking Transparency (ATT) — asked iPhone users for permission to share their data across apps and offered the option to opt out of being tracked.

ATT hammered the ad models of ad-dependent companies like Snap (SNAP) and Facebook-owner Meta (META), while Apple's ad business has successfully grown its adoption to hit 94.8% year-over-year. Apple's so-called search ads enable consumers to discover a company's app when they search on the App Store.

"I think the momentum we are seeing from Apple is twofold: one, is the native nature of its ad placements which yields better performance generally," said Shumel Lais, Appsumer's general manager, via email. "Second, their attribution approach is different to everyone else — thanks to ATT — which also gives them a slight edge."

Though Apple's relationship to consumers isn't inherently ad-driven, the iPhone maker — like so many tech companies — is becoming an ad network, according to Andrew Boone, analyst at Citizens-owned JMP Securities.

"The value-add of Apple is clearly not advertising for the consumer," he said. "There's always some degradation when ads are introduced to a product, but Apple can get away with it."

However, what Apple's ad business going forward actually looks like remains hazy. We don't even know enough to know what the consumer privacy issues could be down the line, according to Boone.

"You don't know what the product is yet, so it's hard to see yet how those privacy concerns could play out," he told Yahoo Finance.

Source: https://finance.yahoo.com/news/apples-digital-ads-business-is-now-challenging-google-facebook-215245924.html