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DIGITAL MARKETING NEWS

Apple’s Ad Business Goes from Strength To Strength

Apple’s advertising arm has gone from strength to strength over the last 12 months, according to data released in its latest earnings report.

JP Morgan lead analyst Samik Chatterjee forecasts that Apple could bring in $6 billion in revenue from mobile advertising in 2025.

Advertising with Apple has seen a broadening appeal since 2021 after it started opting iPhone users out of advertising tracking by default.

Following Apple’s new privacy measures, many apps lost the ability to target and track users. Resultantly, advertisers running mobile app install campaigns began shifting spending to the App Store to achieve the same results as they had before.

The Financial Times, October 2021

“Branch, which measures the effectiveness of mobile marketing, said Apple’s in-house business is now responsible for 58 per cent of all iPhone app downloads that result from clicking on an advert. A year ago, its share was 17 per cent.

 “It’s like Apple Search Ads has gone from playing in the minor leagues to winning the World Series in the span of half a year,” said Alex Bauer, head of product marketing at Branch.

At present, Apple Ads typically focus on download campaigns via the App store.

Apple’s Search Ads work similarly to Google Search, offering promoted placements for apps within the App Store that appear above search results. Users who search for “Uber Eats”, for example, might see Deliveroo above the organic app listings.

However, analysts are predicting this could evolve in time with the eventual launch of an audience network akin to the Google Display Network (GDN).

Samik Chatterjee, JP Morgan lead analyst, June 2022

“We forecast revenues amounting to $1.7 bn by FY25, if Apple were to be willing to build an audience network of third-party applications which allow Apple to manage the logistics of ad targeting and delivering to these applications, matching demand from digital advertising customers with supply of an audience.”

ATT changed the game for Apple

 The ATT changes have weakened Apple’s big tech rivals significantly.

It’s estimated that Twitter, Snap, Meta and YouTube lost $16 billion in revenue between them, while Meta expects it’ll shoulder a $10 billion loss in 2022.

Meanwhile, Apple has benefited to the tune of $3.7 billion and has seen App Store search ad revenue grow 236% over the past year. With that information, it’s hard to argue that Apple’s ATT changes weren’t entirely motivated by the desire to grant users more control over their data.

The Financial Times, October 2021

“The market for app advertising is large and fast-growing. AppsFlyer, another analysis company, estimates that marketing spending on mobile apps for both iPhones and Android phones was $58bn in 2019 and would double to $118bn by next year.”

Big changes

 For those unfamiliar with ATT, read further for a quick rundown.

  • Introduced in 2021, ATT is a new privacy protection framework designed to make it easier for Apple users to safeguard personal information.
  • It allows users to grant or deny permission for apps to track them.
  • The average opt-in rate is now only 28%, based on 300 apps across 2,000 devices.

ATT has given marketers another headache in terms of gathering data from which to launch targeted ads, although Apple’s own ad products help to mitigate things.

Apple Search Ads are the new kid on the block

 One of these products in Search Ads.

Apple

“Apple Search Ads helps people discover your app when they search on the App Store, matching customers with your app right when they’re looking.”

Data presented by Apple shows that if you want to get your app downloaded, you need to be visible on search. It says that 70% of App Store visitors use search to find their next app, 65% of all downloads happen after search and that Search Ads has a 50% conversion rate.

Search Ads come in two offerings: basic and advanced.

Basic search ads are shown at the top of App Store search results and can be used to drive app downloads via intelligent automation that matches ads to interested users. That AI means basic ads are easy to set up but offer marketers fewer customisation options, while pricing occurs on a cost-per-install model.

Advanced ads can be run at the top of App Store results or on the App Store Search tab at the top of the suggested apps list. Marketers can use it to access powerful marketing tools, choose keywords for search campaigns, set audience refinements, set the max you want to pay for a tap or impression and control spending with a daily budget,

The amount advertisers pay will be set at auction, which allows brands to ‘bid competitively without the worry of overpaying’.

With so many users to target and restricted ways of doing so, it’s no surprise that marketers have turned to Search Ads to try and reach customers.

Learn with SMK W/C 4th July 2022

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