Amazon May Benefit From Apple’s New Privacy Tool

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.

Marketers are also eyeing data collected by other retailers including Walmart (WMT) and Target (TGT). They view that data as a valuable way to target ads and measure their effectiveness.

Looking Ahead

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.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

TLS 1.2 Encrypted
Equal Housing Lender