Apple’s (AAPL) digital advertising operation is gaining ground, and challenging Google and Facebook’s dominance of the sector, according to a report by InMobi’s Appsumer.

According to the report, the much-discussed iOS privacy update, called App Tracking Transparency (ATT), asked iPhone users for permission to track them across apps, giving them the option to opt out. That has hit other advertisers’ business models hard.

The update was devastating to the advertising models of social media apps like Snap and Facebook. Meanwhile, Apple’s ad business has successfully grown its adoption to 94.8% year over year.

Shumel Lais, Appsumer’s general manager, said, “I think the momentum we are seeing from Apple is twofold: one, is the native nature of its ad placements which yields better performance generally. Second, their attribution approach is different to everyone else — thanks to ATT — which also gives them a slight edge.”

According to Andrew Boone, analyst at Citizens-owned JMP Securities, Apple’s relationship with its consumers is not primarily ad-driven. However as time goes on, Apple is moving into the ad space. He noted, “The value-add of Apple is clearly not advertising for the consumer. There’s always some degradation when ads are introduced to a product, but Apple can get away with it.”

However there is some degree of mystery remaining about what Apple’s ad model will look like exactly, or how privacy concerns might impact it. According to Boone, “You don’t know what the product is yet, so it’s hard to see yet how those privacy concerns could play out.”

Although Apple’s ads currently revolve around its app store, there are clear signs the company has plans to expand the business in some way. Analysts have noted Apple has been looking to make key digital ad hires, and reportedly seeks to double the size of its ad team.

Boone noted, “So, they’re building something, we just don’t know what it is.”

According to Lais, the longtime dominance of Google and Facebook is on the rocks, and it shows in the share prices, as Google has dropped 25% year to date, and Facebook parent Meta is down 52% year to date.

He went on, “I don’t think that duopoly is over. Not sure if there is a word for triopoly, but that’s the future, if Apple continues to invest and innovate. Meta remains prominent with massive reach, great ad placements and targeting options for marketers.”

And other companies like Snap don’t look to be in a position to capitalize, given the stock year to date is down 75%, and the company is floundering in the face of Apple’s privacy update.

Apple meanwhile, is only down about 14% year to date, as its privacy changes have blocked out competitors, and it is clearly preparing something far more aggressive in the ad space.

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