Analyst says Apple’s privacy feature is smokescreen for its advertising ambitions

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Apple repeated the “p-word” (privacy) as if it were a mantra that needs to be repeated over and over again to convince consumers. Earlier this year, Apple created the Application Tracking Transparency (ATT) feature that lets iPhone users choose whether or not to allow an app to track you across other companies’ apps and websites. Those who choose to be tracked will continue to receive online advertisements related to the products and services they have searched for from their iPhone phones.

Could App Tracking Transparency be a smokescreen to hide Apple’s advertising ambitions?

You might remember how upset Facebook was after Apple announced the app tracking transparency feature and included it in the iOS 14.5 update. As of last summer, 75% of iPhone users decided to opt out of tracking, and only 25% agreed to have their movements on websites and apps continue to be tracked. With Facebook generating over $ 84 billion in ad revenue last year, ATT is likely to have a negative impact on the company’s ad revenue for almost 8 months this year and every year in the future.
But there could be another reason besides the privacy of its customers’ data for Apple’s decision to develop and publish App Tracking Transparency. According to ReutersRBC Capital Markets analyst Brad Erickson said in a note to clients that “We view (the privacy changes) as a sign that Apple might want to compete in global advertising.” Erickson says ATT could be a privacy tool that Apple uses as a smokescreen as it runs on a search algorithm to compete with Google.

Analyst Says YouTube and Amazon Connected Television Could Benefit From Apple’s ATT Feature

A search engine developed by Apple could be a huge source of advertising revenue for both Apple and Google. The analyst adds, “(Apple) can use data privacy as a cover while investing in a behind-the-scenes search algorithm.” Despite what could end up producing more competition from Apple, the analyst has started to cover Facebook, Amazon and Google’s parent Alphabet with top marks.

Indeed, Erickson believes that if advertisers had “no choice but to fly blind with Apple’s signal loss,” Google’s YouTube and Amazon’s Connected TV might be the best places to go. advertisers to promote their products. Remember that without the ability to track iPhone users, Facebook, Google, and other companies serving online ads will not know which sites and apps users have visited.

Have you ever searched for a product online and suddenly noticed that you are getting ads on your phone for that product or store? This is because of the trackers found on apps and websites, many using multiple trackers to record your interests. Once a business like Facebook knows you’re interested in purchasing a new pair of glasses, you’ll continue to see ads on your phone and computer for glasses.

If Apple decides to sell ads, could it ever recover from the criticism it receives from the public and the media?

Reuters notes that Evercore ISI, an investment banking consultancy, also believes Apple is preparing to enter the advertising business. In August, the company said that by “hampering third-party advertising” Apple had made a good start in the advertising industry. Even though he made this comment, Evercore ISI still believes the purpose of application tracking transparency is to protect the privacy of iPhone users rather than helping Apple make money.

Apple might not be interested in starting its own search engine given that Google continues to pay it around $ 15 billion a year to be the default search engine on the iPhone. On the other hand, if Google can afford to make this payment every year, it must earn over $ 15 billion from advertising to iOS users. Apple has undoubtedly taken note of it.

The big question is, if Apple decides to go ahead and make the customer the product, how will Apple be able to bounce back from the blow that it would undoubtedly take from the public and the media?


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