Apple earnings show how much its ad business has grown amid iOS 14.5: App Store search ads have benefited greatly from its privacy update—something advertisers have known for a while and regulators won’t be able to ignore for long.

The remaining two include the used car marketplace Carvana, which occupies a category with very low ecommerce penetration, and Apple, which operates a robust search ads business. That explosion of retail media has reverberated through the US search advertising market.

As retail’s digital dominance grows, Google successfully captures retail ad dollars: Its investments in social commerce on YouTube and improvements to Google Shopping appear to have paid off.

In its rise to becoming a member of the digital advertising triopoly, Amazon revolutionized the search ad market, which has long been dominated by Google. Google still nets the majority of US search ad revenues, but it’s Amazon—not another general search engine, such as Bing—that has taken significant share of the market at Google’s expense.

Apple itself is a beneficiary. Apple offers sponsored search ads in its App Store, and since it only uses Apple’s own data, it’s unaffected by the changes—raising the value of App Store ads for mobile app install campaigns.

Retail search ad products are bottom-of-the-funnel tactics, one click away from many purchases. Amazon Ads leads in this regard, but Walmart Connect is also aggressively marketing search ad products in Canada. “Near me” searches on mobile are helping to push search marketing forward.

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Apple itself is a beneficiary. Apple offers sponsored search ads in its App Store, and since it only uses Apple’s own data, it’s unaffected by the changes—raising the value of App Store ads for mobile app install campaigns.

Android has a similar product called Instant Apps, but App Clips should have broader consumer and developer uptake because 1) the Apple ecosystem revolves more around apps than the web, and 2) Apple has made the connection seamless between a call to action—such as those accompanied by a QR code, deep link, or a place card (business information page) in Apple Maps—and the specific page in an app.

Other ad revenues at Apple for App Store search advertising. Ecommerce channel ad revenues at Amazon’s competitors, including Walmart. Search and the Ecommerce Channel. Per our first-ever forecast for ecommerce channel ad spending in the US, $17.37 billion will be spent within the segment this year, a 38.8% increase over 2019.

And over the summer, Apple announced it would also create difficulties for marketers by making the Identifier for Advertisers (IDFA) opt-in. These changes will hamper advertisers' insights into who was exposed to or interacted with ads, as well as their ability to connect data to that of other channels.

In Q4 2021, search ad prices were up 23% YoY, social ads were up 22%, and retail media ads were up 13%, according to global data from Skai. Higher supply chain costs. These are compounded by inventory constraints stemming from global supply chain issues.

“That means creating an identity structure that is unimpacted by Google or Apple privacy changes. It means connecting with consumers and getting them to say, ‘I want you to communicate with me through authentic channels that we’re consenting to give you.”. Retailers can learn from social media platforms, which are resetting mobile experience expectations.

It remains to be seen whether any EU agencies will take similar action against Apple, Facebook, and Microsoft as a result of the complaints—but it took three years for the Amazon ruling, so they’re not out of the woods just yet. 2. In late July, YouTube announced several improvements to its connected TV (CTV) ad offerings, including better targeting and measurement capabilities.

Retail media is currently dominated by product search ads on ecommerce sites that often draw from shopper marketing budgets—brands just reallocate existing money within a given retailer rather than add more dollars.

Future moves by Google and Apple will probably center on further transparency and greater enforcement. Apple and Google may introduce even stricter opt-ins or further reduce access to elements of location data, but the bigger likelihood is stricter enforcement of existing rules.