The New iPhone Feature Makes Mobile Advertising Expensive!

When Apple launched iOS 14.5 with important new features in April of this year, people hardly knew how much impact this would have on advertisers and publishers around the world. Since the adoption rate of iOS 14.5 has now reached a high level, advertisers have no choice but to abandon the iPhone.

A new report emphasizes that Apple’s App Tracking Transparency (ATT) feature has not only affected digital advertiser giants Facebook and Google, but also millions of brands and organizations that must now abandon iOS and spend more on Android. More digital advertising costs.

Privacy is important to Apple, and when it comes to personal information, the Cupertino giant believes that it must be controlled by users as much as possible. But this move seems to be affecting the global advertising landscape.

Advertisers Ditching Apple: Big Picture

  • Apple announced a privacy-first feature, App Tracking Transparency, for iPhone and iPad users with the release of iOS 14.5.
  • Apps that rely on targeted advertising dollars face a huge blow as they have to seek permission from every individual iPhone user for tracking their activities. Undoubtedly, no one wants to be tracked!
  • Due to Apple’s App Tracking Transparency, advertisers have started shifting their focus from iOS to Android.
  • Over 70% of iPhone are already upgraded to iOS 14.5 now. It means that all those users will see tracking prompts from every app that tries to serve targeted ads to those users.
  • According to Flurry, another mobile app research firm, only 25% of iPhone users who see such tracking prompts allow apps to track their data. 
  • As result, the advertising spends on iOS devices fell by about a third in June, according to mobile ad measurement company Tenjin.
  • Advertisers have started channelising their ad dollars towards Android as the ad spends on Android increased by 10% during the month of June.
  • The data coming from digital advertising agencies don’t paint a different picture either. Clients that were spending on ad campaigns designed for iOS apps have mandated their agencies to shift the focus on Android apps now
  • Tunuiti, a digital marketing agency, has revealed that its clients who are spending on Facebook ads are willing to spend more on Android than iOS. The YoY growth in advertising spends on iOS went down to 25% in June from 42% in May. In contrast, ad spent growth on Android increased to 64% in June from 46% in the previous month, as reported by the agency.
  • Until now advertisers tend to spend more on iOS as iPhone users are considered as ‘high-value target’ than those on Android.

Food for Thought

Both Facebook and Google are very concerned about the dynamic changes in the field of digital advertising. So why not; advertising accounts for more than two-thirds of its annual revenue. In fact, Mark Zuckerberg has been criticizing Apple's new features because nearly 99% of the social media giant's revenue comes from advertising.

Although Apple’s user base is smaller than Google’s Android users, Apple has the largest share of global app advertising revenue each quarter. Every iPhone user’s wealth and wealth will not be hidden by any advertiser, which is why advertisers spare no effort to mine iOS users by tracking their preferences and interests.

All of this is now changing, and the new dynamics will have a direct impact on the global digital advertising market. How this situation will eventually develop, only time will tell, but given Apple’s current position, brands and advertisers must be prepared to pay higher CPC and CPM in the next few days.