Amazon May Benefit From Apple’s New Privacy Tool
Amazon Can Still Track
Apple’s (AAPL) new privacy rule may benefit Amazon’s (AMZN) advertising business. Late last month, Apple launched its App Tracking Transparency tool as part of its new iOS 14.5 operating software. The tool gives users more control over their privacy, including the ability to prevent advertisers from tracking them online. This means apps like Facebook (FB) and Google (GOOGL) may not be able to collect data on users which they leverage for targeted ads.
Amazon users on Apple devices will see a prompt to opt out of tracking. However, this will have little impact because the ecommerce giant will still be able to track what users are doing for as long as they are logged in to their Amazon account.
Amazon’s Ad Business Is Already Booming
As it stands, Amazon is becoming a juggernaut in the digital advertising market. Revenue from the ecommerce company’s “other” business category, which is mainly ads, rose 77% in Q1 to $6.9 billion. Amazon collects a large amount of consumer data from its more than 200 million Prime members. That data will become even more valuable to advertisers if Apple users opt out of app tracking in large numbers.
It is too early to gauge the impact of Apple’s new privacy tool but many think it will not significantly harm other tech giants like Facebook and Google. Both will still have access to information about what people are doing on their own internet properties.
But that data may not be as attractive to marketers compared to what Amazon collects. Since the pandemic, consumers have been making more purchases online, prompting brands to look for more intel on their ecommerce customers. With net sales of $108.5 billion in the first quarter alone, Amazon is well-positioned to give marketers that information.
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