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NETMEDIA International

Apple ‘May Be Working On Mobile Advertising Platform’



Anti-tracking tech in iOS 14.5 may be part of Apple plan to compete in online advertising against Facebook and Google, financial analysts say.

A financial analyst has speculated that anti-tracking changes recently introduced by Apple to its iPhone could signal that the company is working on an advertising platform of its own. Apple’s App Tracking Transparency (ATT) feature, released with iOS 14.5 in April, allows users to opt out of their activities being tracked by the apps on their devices. Rivals such as Facebook use such tracking data to tailor advertisements and measure their effects. Facebook says Apple’s move has made it more expensive and difficult for brands to advertise on its platforms.

RBC analyst Brad Erickson joined some other industry watchers in speculating that the move could well be preparing the way for Apple to compete in an online advertising world controlled by the likes of Facebook and Google.


Ad platform

“We view (the privacy changes) as a sign that Apple may want to compete in global advertising,” Erickson said in a research note.


“(Apple) can use data privacy as cover while it invests in a search algorithm behind the scenes,” he said, referring to the potential for advertising revenue from an Apple search engine.


Erickson added that if advertisers had “no choice but to fly blind with the loss of signal from Apple”, then Google’s YouTube and Amazon’s Connected TV could benefit.

Analyst firm Evercore ISI also suggested Apple may have an advertising platform in the works in August, saying such a move would be aided by “hampering third-party advertising”.


Opt-out

Before the iPhone changes, Facebook had accounted for 80 percent of the traffic that online advertising company Carousel sent to its product pages, but that has now dropped to 20 percent, the company told CNBC late last month.


Aaron Paul, a marketer at Carousel, said he also thought Apple was looking to get into advertising, speculating to CNBC that “they’re doing all of this to build their own ad platform”.

Verizon Media’s Flurry Analytics found in May that the vast majority of iOS 14.5 users were opting out of tracking, with only an estimated 5 percent of US daily users allowing their activities to be tracked.


Apple has presented the ATT tool as being part of its stance on consumer rights, with chief executive Tim Cook telling analysts at an earnings call in April, “we’re really standing up on behalf of the consumer here”.


Controversy

But advertisers are less inclined to buy into that message, with Kelcey Lehrich, chief executive of 365 Holdings, which owns e-commerce brands and advertises extensively online, telling CNBC, “I don’t think that Tim Cook is this benevolent privacy person.”

The shift has also been vocally criticised by Facebook, which at one point launched an advertising campaign saying the ATT technology would harm smaller businesses.

Apple did not immediately respond to a request for comment.

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