![]() ![]() based customers are much more valuable to advertisers than average worldwide customers (Facebook makes 6x on the average U.S. That's a massive customer base that AT&T and other telecom companies can now track across apps.Įxcluding the fact that U.S. For perspective, Apple has 588 million customers worldwide and AT&T has roughly 170 million customers. That means a massive pool of data, which using Apple's Google deal as a benchmark, is worth at least billions every year. In fact, they could potentially pass improved data due to their ability to track cross-app. The opportunity here is that, with Apple likely unable to go back on its "privacy" word, and billions in lost revenue for major social network companies, the telecom companies now have the ability to give these networks the exact same set of data they were gathering before. It's clear from here that they should be able to get all the same information about you. Verizon has recently texted users about a "custom experience." The new feature is opt-out for customers, the same way Apple's privacy settings previously were, and while they're not sharing significant details on the specifics of what it'll mean, to start with the tracking based on "more relevant offers" seems to be a copy of what ad-IDs once were.Īs you delve into what that "Customer Experience" plus means, again with default opt-in, you can see that it's using a "CPNI" identifier to track you in the same way that the app and advertisement identifiers Apple has now blocked once could. The opportunity here is based on what we see as telecom's unique ability to bypass Apple, the massive financial incentive to do so, and Apple's hardened privacy stance. Digital ad spending is expected to grow from ~$450 billion in 2021 to almost $650 billion by 2024 representing $200 billion in new advertising revenue to be grabbed.Ī growing share of a growing market is the place to be. Given that digital ad spending is already enormous, and expected to continue growing, buoyed by people staying home from lockdowns, this number and the opportunity size can only be expected to continue growing. More so, it highlights the value of targeted advertising to Apple's customers. At almost pure profit, it's a valuable part of even a large company like Apple's earnings. For 2021, that number is estimated to be $15 billion. The net result has been, as Apple grows, Google has been paying Apple a steadily increasing amount to be the default Safari search engine. Google, the most successful search engine in history saw a massive market opportunity to achieve new customers for its ads. Apple's popular default Safari browser, another privacy focused browser from the company, doesn't have a default search engine (since Apple doesn't operate one). Advertising Revenue with TrackingĪ classic example of the revenue potential here is Google's ( GOOGL) payment to Apple. ![]() Using AI and other technology it allows them to build a unique model of what you're most likely to respond to, thereby serving you much more effective advertisements. The benefits of unique tracking are enormous to advertisers. Snapchat ( SNAP ) reported bad earnings as well because of the changes, although as discussed here, we still feel they're a good investment overall. The estimated second half of the year revenue change alone for large technology companies is expected to be almost $10 billion. The blow is expected to be massive, although the details aren't out. With their iOS 14 update, Apple reinforced this stance by mandating that all apps use an "opt-in" model for unique user tracking rather than an "opt-out" model which has a much higher success rate. Unique TrackingĪpple ( AAPL) has always been known as the privacy focused tech company, a unique business model in the technology industry. AT&T ( NYSE: T ) and T-Mobile ( NASDAQ: TMUS ) have the exact same capability. Recent news came out that Verizon ( NYSE: VZ) has begun informing customers that it'll be tracking users by default, and there's nothing Apple can do. Technology companies have involved into multi-trillion dollar enterprises dominating the market, and in that market, they've become massively competitive behemoths. Nikada/iStock Unreleased via Getty Images ![]()
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