Apple's Data Privacy Makes Ads More Expensive

Issue 78

Back in April Apple pushed for increased data privacy for its iOS users by forcing apps obtained through the app store to request tracking permission of its users.  Since then, mobile advertising companies have shifted away from advertising through the iOS system and are now focusing their efforts on Android.

After Apple required apps to request tracking permission less than 33% of users have opted in to allowing their apps to track them across their device.  Because of this several companies have decided that the cost of advertising on iOS is too expensive despite recent cost drops.  This has not affected Apple significantly as the company only advertises on a few of their own apps and gains no profit from ads on third-party apps.  The companies most affected by Apple's new privacy policies are Facebook and Google, who obtain a significant portion of their revenue through mobile app advertising.

Facebook and Google have been able to make up some of the difference, however, as the price of advertising on Android has increased by 30% as it becomes the dominant platform for mobile advertising companies around the world.  Android has also been the most used operating system on mobile devices with 72.8% of all smartphones around the world use the Android operating system.  

Facebook has stated that since the majority of smartphone users have the Android operating system it is likely that the company will benefit from the increase in ad prices on the platform.  Facebook also believes that the companies that will be hurt the most are the small companies that will now be forced to pay for higher ad prices.

Source: Wall Street Journal