Apple’s New Tracking Policy Causes Concern for Advertisers

Ad Dollars Shifting to Android

Apple’s (AAPL) decision to require apps to get users’ permission to track their iInternet activities is having an unintended consequence. Companies are shifting their spending to advertising with Google’s (GOOGL) Android devices.

Since Apple’s new policy went into effect in April, Apple users have received and declined a large number of requests from apps seeking permission to track them. Fewer than 33% of iOS users have opted in to tracking. As a result, digital advertisers have lost a lot of the data that made advertising on Apple devices effective.

This is particularly true for Facebook (FB). Without the ability to track activity in its iOS apps, advertisers have less data to leverage when using the social media giant’s ad-targeting tools.

Facebook Takes a Hit

The impact of Apple’s changes was not evident until June when more than 70% of iOS devices had the software upgrade. From June to July, ad spending on iOS fell by over 30% while Android spending increased by 10%. The prices for Android ads are now 30% higher than ads targeted at iOS users.

Facebook, an advertising giant, has taken a hit due to the changes. Apple’s tracking policy limits the flow of data to Facebook, which in turn reduces the effectiveness of its ad-targeting tools. Facebook, one of the biggest critics of Apple’s changes, had previously warned it could result in its Audience Network tool shutting down. This is a tool which allows advertisers to buy ads in non-Facebook apps based on data Facebook collected from users.

Apple Looks Ahead

Despite the turmoil Apple’s new policy is causing for advertisers and rival tech companies, Apple’s ad business may not be significantly impacted. The company only sells ads in a few of its apps and does not get any ad money from third-party apps. Apple is not as dependent on ad business as Facebook and Google.

Additionally, Apple’s sales of phones and other hardware may increase because users want to protect their privacy. It will be interesting to see how advertisers will continue to respond to the changes Apple has made, and how the new policy will impact Apple’s bottom line.

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