An Apple Ad-pocalypse For Everyone?
You know about those changes to ad tracking that apple is going to flip the switch on on ios. Soon you know how facebook has said this will hurt small businesses and also them quite directly. They've also admitted. Well as this ad pacalypse creeps ever closer. There is increasing chatter about how big this move might actually be for basically everyone let me hit some of the most recent takes for you i. What prompted me to lead with this. Today is that in their earnings last night. Snap had to warn that. The coming changes by apple to idea a could have a materially adverse effect on their business and it wasn't just snap either unity also came out and said idea changes will hit the pocketbooks of all mobile game developers quoting cnbc. Unity software said in its earnings report. That the changes will affect the way mobile game developers get and quote how they optimize lifetime. Customer value and quote although it's difficult to estimate our guidance assumes idea changes begin in the spring and will reduce revenue by thirty million dollars or three percent of revenue in two thousand twenty one. The company wrote in prepared remarks for its q. Four earnings report snap chief financial officer derek. Anderson said the apple changes would present a risk of interruption to demand after their implemented quote. It is not clear yet. What the longer term impact of those changes may be for the top line momentum of our business and this may not be clear until several months or more after the changes are implemented. He said quote so coincident with that. I know that this is long. Reads day but i encourage you to check out ben. Thompson's free article from strategically this week because it is the most sober and i opening look at this situation that i've seen anywhere thompson did a qna with mobile marketing analyst. Eric su firt and he had some interesting things to say about. Apple's true motivations and all of this and how these changes could ripple out to affect not only game developers but things like chiappa fi and the smaller businesses on that platform. I highly highly recommend. You read the whole thing. But i'm going to quote two parts for you first up. This is ben quote the thing that is always kind of weird to me about this. Is i think people underestimate and frankly i think apple underestimates the degree to which apple's growth in services revenue growth in. The app store is because of facebook and that facebook and apple have had this very symbiotic relationship. facebook has done. All of apple's dirty work and apple has harvested thirty percent on the back end just by virtue of owning the app store. The question i have is. Is it possible. That apple is shooting themselves in the foot here and their services revenue actually takes a meaningful hit because they've destroyed the engine driving it and they didn't even realize it because they actually didn't understand facebook's role in this and then this is eric's answer quote. I don't think so. I think apple very much recognizes the role that it plays in the app ecosystem which is the distribution engine for apps. And i think that's what apple doesn't like. I think apple sees that the app store has basically become irrelevant as a point of content discovery. It's basically this kind of frictional annoying moment between clicking an ad and installing an app almost all discovery happens via ads or word of mouth. And i think what apple is doing in this in recognizing the power that facebook has in terms of influencing which apps become big which apps are popular. How people are using their iphones. Essentially in recognizing that apple is trying to regain control of that because if apple cripples advertising which is doing mobile advertising this is all happening within the context of all this stuff. That's happening on the browser which we don't need to go down that rabbit hole but apple has been the instigator of all of that too if apple cripples mobile advertising than the app store becomes the primary discovery point for apps again and apple decides how people use our iphones apple decides which are the most popular. And by the way. That's a position that apple used to occupy twenty twelve twenty. Thirteen apple was kingmaker. If you've got featured your company valuation might increase by one hundred million dollars it was really important to make that pilgrimage to apple. Go to cupertino and beg for featuring please feature as please give us the headline featuring because that would make such a big difference to our company then in that way apple got to influence. What kind of apps made and how you made them. So my sense here is that apple wants to regain that control and quote and then from further down in the piece. This is ben again. The great thing from google's perspective is they get to copy everything. Apple does which completely benefits them because apple wants to kill cookies. Google's like that's fine. We have the browser. We have the app store and we're justified in doing blatantly anti-competitive things because we're just copying apple. The apple. google duopoly is really ruling. Everything and this is eric's response. Yeah google silence on this issue has been really intriguing. Because i think they've got to feel like a little bit stuck. It's like well okay. We're going to slow copy apple on any privacy initiative. It does because we don't want to allow apple to create a competitive advantage around being seen as the privacy centric mobile platform but at the same time they run an ad network so day can't come out and demonize targeted advertising. Because well that's how they make some substantial portion of their money. Ben interjects here. They're being sued for antitrust. And this is so blatantly. Anti-competitive and eric responds right exactly. They've got a fine line to walk. And i think they've you to a very shrewd approach. Which just like you said. Kind of copy. What apple is doing but doing it in a way that is not a full manifestation of that and quote again read. The whole thing cannot recommend it highly enough are we all of us in the tech ecosystem facing an ad pacalypse