Apple wins over Facebook and Google in online ads after iOS change

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A US Federal Communications Commission official said he had asked Apple and Google to remove TikTok from their app stores for data security reasons. Pictured is the TikTok download page on an Apple iPhone on August 7, 2020.

Drew Anger | Getty Images News | Getty Images

The Google-Facebook online advertising duopoly may be dissolving.

According to a study published Tuesday by Appsumer, Apple is gaining momentum in digital advertising, while Google and Facebook seem to be losing momentum.

The research, based on an analysis of the online advertising budgets of more than 100 different consumer app companies, found that Apple’s advertising business benefited from the company’s major iOS privacy update. in 2021, making it harder for companies like Facebook to track users across the internet.

Apple’s search ads allow people to advertise on the iPhone maker’s app store. Advertiser adoption rate for the second quarter increased nearly 4 percentage points from a year earlier to 94.8%, while Facebook adoption fell 3 percentage points to 82.8%, Appsumer said. Google’s rate fell by 2 points to 94.8%.

Apple has “joined the Facebook and Google duopoly at the top of advertiser adoption,” according to Appsumer, which is owned by InMobi.

Shumel Lais, chief executive of Appsumer, attributed Apple’s improved position to an increase in app developers willing to pay big bucks to bolster downloads. At the same time, Apple’s App Tracking Transparency (ATT) update has limited the amount of data ad-based apps like Facebook can use to help brands with their online advertising campaigns.

“One of the pretty interesting things is that the ATT metering limitations that are sort of imposed on the larger network don’t exist in the same way for Apple,” Lais said. “So you could say that Apple has a bit more visibility or an advantage over other channels on iOS.”

The increase in Apple’s online ads for developers reflects Amazon’s position in e-commerce as retailers spend more money promoting their products on the site they rely on for customers.

In terms of app developers’ overall spending on online advertising, known as share of wallet, Google remains in the lead at 34%. Facebook is second with 28%, followed by Apple with 15%. Amazon was not listed because it is not a platform for developers.

At the bottom of the market, TikTok overtook Snap, which was also hammered by ATT. TikTok has 3% market share and Snap is at 2%, Appsumer said.

Even though it overtook Snap, TikTok’s adoption rate dropped almost 7 percentage points in the second quarter. Lais said app developers are still trying to figure out which ads work well on the short video service.

“Brands may still be adapting to make TikTok work for each vertical,” Lais said.

The numbers weren’t all bad for Facebook. Its share of wallet rose 4 points to 28% in the fourth quarter, indicating that the social media company is seeing “signs of recovery”, Lais said. In July, Facebook’s parent company Meta reported a bigger-than-expected drop in second-quarter revenue and said sales would fall again from a year earlier in the third quarter.

Lais said Facebook benefits from the serendipity of ads, compared to Google and Apple, which serve ads based on search terms.

“Facebook still has some very unique properties and people are in a mindset where they’re kind of in discovery mode, so there’s still opportunity there,” Lais said.

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