What is the clever strategy that Apple used the 'story' as a weapon to kick down competitors and grow the advertising business?
Apple's advertising business has experienced explosive growth since the introduction of the privacy regulation ' App Tracking Transparency ', which is said to have revolutionized the industry. Criticism that it is expanding its own advertising business has also become prominent. Writer Nathan Bo talks in a series of tweets about how Apple outstripped its competitors and expanded its advertising network.
Apple surpassed $3.5B in annual revenue from its ad network.
—Nathan Baugh (@nathanbaugh27) August 18, 2022
But it crushed FB, Snap, and 1000s of small businesses in the process.
How? By nailing the narrative that big tech threatens consumer privacy.
Here's the breakdown????
In a 2019 article for Time magazine, Apple CEO Tim Cook sent the message that 'consumers have the right to privacy.' However, if you read this message based on Cook CEO being the top of a large company, 'Unlike other big tech , Apple protects consumer privacy.'
In 2019, Apple's advertising business was $500 million (approximately 55 billion yen at that rate), with Amazon's $13 billion (approximately 1.43 trillion yen) and Facebook's $69 billion (approximately 7 trillion yen). 590 billion yen).
Take a look at the size of each company's ad business in 2019:
—Nathan Baugh (@nathanbaugh27) August 18, 2022
• Apple, $500 million
• Amazon, $13 billion
• Facebook, $69 billion
Apple breaks out its ad revenue as part of its 'services business' (in red).
Cook previously made a promise for services to hit $50B by 2021. pic.twitter.com/QP5fcd3kSg
At this point, three things come to mind. First, 'Apple wanted to expand its services business,' second, 'Apple understands the power of stories,' and third, 'Apple found stories they can use.' thing. And the story Apple found was the aforementioned privacy policy. Regarding this point of view, Mr. Bo evaluates that 'Apple has started the most effective marketing campaign in history.'
And from 2019 to 2021, Apple spent a lot of money repeatedly appealing the importance of privacy to spread its story. This goes beyond mere marketing to building a massive product update platform that will change the face of any consumer facing business.
From 2019 to 2021 Apple spends millions to get its narrative in front of 100s of millions of consumers.
—Nathan Baugh (@nathanbaugh27) August 18, 2022
But this isn't just marketing.
Apple is laying the foundation for a massive product update that'll change how all consumer-focused businesses operate. pic.twitter.com/D2ymYE1MW2
And with the long-awaited release of iOS 14.5 , Apple really brought the story to life. Starting with this version, when you open an app, your iPhone will ask you if you want to be tracked by that app. And no one wanted Facebook to track them. As a result, it is said that the percentage of users who refuse tracking has reached more than 95%.
Apple releases iOS 14.5 in April '21 — turning the narrative into a product feature.
—Nathan Baugh (@nathanbaugh27) August 18, 2022
When opening a new app, your iPhone asks if you want the app to track you.
Nobody wants Zuck tracking them.
The result — 95%+ of users ask apps not to track.
Pay attention to the word choice: pic.twitter.com/21hpJB2eBs
The consequences of this change for our competitors were clear. Since the release of iOS 14.5, the stock index S&P 500 has risen 2.8%, but during the same period, Meta's stock price has fallen by 40%, Snap's stock price has fallen by 80%, and Canadian e-commerce company Shopify's The stock price fell sharply to -66%.
Bo attributed the decline in Meta and Snap's performance to the increased cost of acquiring customers for advertisers at both companies as a result of the difficulty in collecting data and the lack of targeted targeting. I'm here.
In my mind, the effects go like this:
—Nathan Baugh (@nathanbaugh27) August 18, 2022
1. Meta and Snap can't collect the same data
2. They struggle to target users as effectively
3. Customer acquisition costs rise for advertisers
But what does Shopify have to do with this?
As an e-commerce company, Shopify wasn't directly affected by its advertising business, but with thousands of small businesses doing business on Shopify facing rising costs, Shopify's performance was also affected by Apple's privacy strategy. I received
Apple encouraged users to opt out of tracking while turning on Apple's 'personalized ads.'
Remember the copywriting Apple used to get consumers to opt out of ad tracking?
—Nathan Baugh (@nathanbaugh27) August 18, 2022
Well, their own ask to track you reads quite different (h/t @sethmills21 ).
Bonus points for the highlighted “Turn on personalized ads” ???? pic.twitter.com/bTGDW0hB9r
These strategies have been very successful, with the advertising business growing from less than $500 million in 2019 to an estimated $4 billion in 2022. Not satisfied with this, Bloomberg reports that Apple plans to place advertisements in its own apps such as 'Maps'.
As you may have guessed, Apple has grown its ad business big time:
—Nathan Baugh (@nathanbaugh27) August 18, 2022
• 2019: <$500M
• 2022 (estimated): $4B
But it has bigger ambitions.
Apple recently announced ads are coming to more of its ecosystem. https://t.co/pYg5iRcxVy
Bo points out that the ingenuity of iOS 14.5 is that it ``prohibits data exchange between different parties, but does not prohibit data exchange within a single platform.'' I'm here. Because Apple is that single platform, you can fully utilize your personal information without taking the data outside.
Regarding the strategy of Apple's rapid expansion of the advertising business, Mr. Bo said, ``I do not intend to blame Apple, but it is important to understand what has been sacrificed.In other words, Apple has weapons with stories. It has kicked out its competitors, crushed small businesses in the process, and strengthened its own advertising business.'
I don't blame Apple. Their ad network will be a $10B+ rev stream.
—Nathan Baugh (@nathanbaugh27) August 18, 2022
But it's important to understand the tradeoffs. Apple:
• Weaponized a narrative to harm competitors
• Crushed small businesses in the process
• Bolstered their ad biz
And yes, they're still using your data.
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in Web Service, Posted by log1l_ks