The digital advertising world is scrambling to prepare for a seismic change when Apple updates its iPhone software in the coming weeks.
The move, called App Tracking Transparency, or ATT, will force app makers to ask permission before they can collect a unique identifier on every iOS device called an identifier for advertisers, or IDFA. A significant proportion of users are expected to say no. Today, developers and advertisers use the IDFA to target mobile ads and measure how effective they are.
Apple has consistently said that the change to its platform, announced last June, is about privacy.
However, digital advertising professionals say there could be a side benefit for Apple: Increased power over its App Store, giving Apple more control over the kinds of apps that get popular and gross millions through the store.
In particular, it could make it harder for app makers to draw consumers to download their apps through in-app advertisements. That could help Apple instead guide consumers to the apps that it chooses to highlight in the App Store for its own business purposes. For instance, Apple could highlight more games that charge through subscriptions, where Apple gets an ongoing cut and fewer casual social games that monetize heavily through in-app purchases.
The move could also boost Apple’s own Search Ads, which are ads for app downloads that appear directly inside the App Store.
Apple’s App Store and advertising business are both reported as part of its services business, which the company has highlighted to investors as a growth engine. It generated revenue of $53.8 billion in fiscal 2020, up 16% from the previous year.
Apple’s search ads have an advantage over other ad networks because Apple doesn’t need to do cross-site tracking to identify people likely to buy — with search ads, the user already has signalled intent to download a particular type of app.
As app-install ads become less effective, more app makers may be driven to buy Apple’s search ads.