A major factor to consider here is that last year Apple knocked a bunch of competitors – whether that was their intention or not – in implementing its AppTrackingTransparency (ATT) changes last year with its iOS 14.5 update, providing users with more clarity around how apps tracked their behaviour and giving them the opportunity to opt-out of tracking.

As a result, the vast majority of users opted out, leading to significant ‘signal loss’—a reduction in the amount of web browsing and ecommerce behaviour that powered Meta’s ad targeting and measurement mechanism. 

Perhaps the purest representation of Apple’s strategy at work can be found in Meta’s mobile app install business, which pays app providers to target the right users and drive app downloads. Apple’s changes disrupted this business, pushing advertising away from Meta and in the direction of—wait for it—Apple. In one fell swoop, Apple just took a huge bite out of Meta’s ad business. Meta is feeling the effects beyond mobile app installs: Advertisers of all sizes are having a harder time reaching the most valuable audiences and proving return on ad spend (ROAS). Those budgets are now migrating into other channels that can better show results.

Another reason as to why Apple’s AppTrackingTransparency provides it with an advantage is that measurement is arguably the single most important factor that’s driven the growth of digital ad spending since its early days. Google was the first to unlock big budgets, largely on account of the tight closed-loop measurement for search ads. Facebook followed suit during the social ad era, and now Amazon is replicating that model in retail media.

Apple’s approach is likely to involve broader audience segmentation, but by being able to prove performance on the back-end–and theoretically with a lot more transaction data–it’s going to have a formidable apparatus.

According to analyst Andrew Lipsman via Insider Intelligence, Apple will probably launch a search engine at some point, Lipsman predicts, which would obviously have huge implications for Google. Think about how easily it could replace Google as the default search engine. If Apple could clear that quality hurdle with organic search results, with the benefit of being able to maintain a more modest ad load, it’s reasonable to think it could take market share from Google. 

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