Apple accused of using app-tracking crackdown to sell ads

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Apple stands to increase ad revenue from recent changes.
Photo: Josh Davidson for Cult of Mac

Apple is being accused of engaging in sneaky behavior when it comes to its advertising strategy. According to a Wall Street Journal report, advertisers who are targeting iPhone users say they will “get more data about ad performance if they buy Apple’s ad space than if they buy through third parties.”

iOS 14.5 offers new privacy oriented features that let users opt out of tracking for personalized ads. However, Apple also sells ads itself in the App Store, News, and Stocks. It has recently been bolstering its efforts in this department.

The WSJ report claims that:

“Advertisers who buy Apple ad space can receive more data about user behavior, the people said. They can learn which version of their ads users saw and which search keywords ads appeared on, they said. Those advertisers will get results in nearly real time, [ad industry executives] said.

That could give Apple an edge in luring advertisers, especially if the tech company expands its ad business, ad-industry executives say. Right now, Apple sells search ads that appear in its App Store, and display ads that appear in its News and Stocks apps.”

To be clear, Apple targeted ads don’t work in quite the same way to other tech companies’. Yes, they are targeted based on usage details such as device information, location, App Store searches, the stories you read on Apple News, the apps users download, and more.

But Apple’s personalized advertising does not track users across apps. Most importantly, Apple doesn’t sell individual users’ data, but targets according to broad, anonymized categories.

Questionable optics

It’s still questionable optics, however. Apple is cracking down on personalized advertising models at the same time it’s boosting its own own ad business — which, admittedly, is way smaller than the likes of Facebook’s. The WSJ report:

“Apple’s app-store advertising is expected to bring in about $2 billion this fiscal year, according to an estimate from Cowen & Co. Last fiscal year, Apple’s total revenue was $274.52 billion. By comparison, Facebook reported $84.17 billion in ad revenue last year.”

From a user perspective, it’s very compelling that Apple can make a moral argument about the merits of privacy. CEO Tim Cook has been clear in the past that there are some issues he doesn’t consider the ROI (return-on-investment) for, and has spoken about privacy in moral, not business, terms.

The accusation that this is just about hurting other companies to push people to pay Apple ad revenue is one that critics are sure to use to attack the Cupertino giant.

The likes of Facebook have already argued that Apple’s App Tracking Transparency feature risks hurting small businesses.

What do you think of this conundrum? Should Apple be in the ad business at all? Is this a cynical move to hurt rivals or a legitimate, moral one on Apple’s part? Let us know your thoughts in the comments below.