Apple gains Facebook and Google in online ads after iOS change
The US Federal Communications Commission leader said he has asked Apple and Google to remove TikTok from their app stores due to data security concerns. The image here is the TikTok download page on your Apple iPhone on August 7, 2020.
Drew Angerer | Getty Images News | Getty Images
The online advertising duopoly between Google and Facebook may be in the process of collapsing.
According to a study published on 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, which made it more difficult for companies like Facebook to track users online.
Apple Search Ads allows people to advertise on the iPhone maker’s App Store. Advertisers’ adoption rate for the second quarter rose nearly 4 percentage points from a year earlier to 94.8%, while Facebook’s adoption rate fell 3 percentage points to 82.8%, Appsumer said. Google’s price fell two points to 94.8%.
According to InMobi-owned Appsumer, Apple has “joined the duopoly of Facebook and Google at the top of the list of advertisers’ adoption”.
Shomel Lais, general manager at Appsumer, attributed the improvement of Apple’s standing to the increase in the number of app developers willing to pay big money to boost 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 ad campaigns.
“One of the interesting things is that the limitations of ATT scaling that are somewhat placed on the broader network don’t exist in the same way for Apple,” said Laiss. “So you could say Apple has a bit more visibility or advantage over other channels on iOS.”
The rise of Apple’s online advertising for developers mirrors Amazon’s e-commerce position, as retailers spend more money to promote their products on the site they rely on to customers.
In terms of total app developer spending on online advertising, referred to as the wallet share, Google remains on top with 34%. Facebook comes in second with 28%, followed by Apple with 15%. Amazon is not listed as it is not a developer platform.
At the lower end of the market, TikTok has outperformed Snap, which has also been beaten by ATT. Appsumer said TikTok has 3% market share, while Snap has 2%.
Although it topped Snap, TikTok’s adoption rate fell nearly 7 percentage points in the second quarter. Laes said app developers are still trying to figure out which ads work well on the short video service.
“Brands may still be adjusting to making TikTok work in every sector,” Lais said.
The numbers weren’t all bad for Facebook. Its share of the portfolio rose 4 points to 28% in the fourth quarter, indicating that the social media company is seeing some “signs of recovery,” Laiss said. In July, Facebook’s parent company Meta reported an unexpected drop in second-quarter revenue and said sales would drop again from the same period last year in the third quarter.
Laiss said Facebook is taking advantage of ad serendipity, as opposed to Google and Apple, which serve ads based on search terms.
“Facebook still has very unique characteristics and people are in a mindset where they are in sort of a discovery mode, so there is still an opportunity there,” Laiss said.
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