Apple introduced in April of 2021 a new privacy policy called ATT (App Tracking Transparency), this new policy moderates the data collection and aggregation practice known in the mobile industry as “tracking”.

Under this new policy, an app must ask for the user’s consent before collecting his unique identifier. This unique identifier is called IDFA and it was heavily used by advertising platforms to target users, personalize ads and optimize campaigns.

The impact of Apple’s ATT on the mobile advertising industry was enormous.

Companies like Facebook and Snapchat in recent quarterly earnings show some losses in their reports and it was mostly caused by the frictions on the new ATT policy since it changed the way to impact iOS and to track them.

On the other hand, Apple Search Ads (ASA), Apple’s mobile advertising platform had substantial growth since the new ATT policy. But why?

To understand that we need to understand what is SKAdNetwork.

The SKAdNetwork essentially enables advertisement platforms to attribute app installs and ads, but it has significant limitations. It doesn’t provide much context on the install, such as which ad generated the install or the exact time it occurred. This lack of granular data is critical for advertisement platforms to effectively target and optimize, and for advertisers to understand and evaluate their campaign performance.

After the release of the ATT policy, many advertisement platforms were required to use the SKAdNetwork for install measurement because it respects the privacy of iOS users by anonymizing their data. However, Apple Search Ads (ASA) does not use the SKAdNetwork for ad attribution, giving it a significant advantage in attribution and user data for optimization and targeting.

There is a dilemma about whether Apple is adhering to its own ATT policies. According to Apple's Advertising Privacy & Policy Documentation, Apple states that ASA does not track users. However, they have found a way to do so without breaking their definition of “tracking.” According to Apple, "tracking" refers to linking data collected from an app about a user or device with third-party data for targeted advertising or sharing such data with a data broker.

Instead of using the SKAdNetwork for attribution, ASA uses Apple's Ads Attribution API, which provides much more detailed install attribution data. This API offers information such as which ad creative delivered the install, when the install occurred, and even where it happened—details not available through the SKAdNetwork. This gives Apple a significant edge over other ad platforms that must use the SKAdNetwork when a user has opted out of ATT.

Another issue for developers is the ATT opt-in prompt shown to users. Developers can only customize the text under the headline, which reads, "App Name would like permission to track you across apps and websites owned by other companies." This intimidating message does not communicate the benefits of opting in for tracking. Developers believe that the ability to modify this message could increase the opt-in rate significantly.

Furthermore, Apple sets a 30-day lookback window for install attribution when the user has opted out of ATT, which is not industry standard. This extended window increases the number of users attributed to ASA. Apple does not allow advertisers to shorten this window, whereas most other ad platforms do.

These factors have contributed to the rapid growth of Apple Search Ads. According to the Financial Times, Apple could earn $5 billion from advertising in 2021.

The question remains: What will other ad platforms do to compete with Apple, given that Apple is currently setting the rules of the game?