Amazon May Benefit From Apple’s New Privacy Tool

Amazon’s Online Ad Business Grows Thanks to Apple’s Privacy Changes

Amazon Picks Up Business From Facebook

Amazon’s (AMZN) online advertising business is growing, partially due to Apple’s (AAPL) recent changes to its privacy policies. Running ads on Facebook (FB) has become less effective since the iPhone maker’s new privacy changes went into effect in June, which is prompting marketers to shift dollars to other destinations like Amazon.

As it stands, Amazon, which was late to invest in digital advertising, only controls about 10% of the market. However, advertising is one of Amazon’s fastest-growing segments. Revenue in Amazon’s “other” category, which mainly consists of ad sales, increased 87.5% during the second quarter of the year. Facebook’s ad sales also saw growth, but not as much as Amazon’s. The social media giant saw ad sales gains of 56%.

Apple Privacy Changes Hurt Facebook

The idea of Amazon chipping away at Facebook’s online ad sales would have been met with skepticism a few months ago. After all, Facebook has more than 2.8 billion active monthly users and social media has been a coveted place to reach potential and existing customers.

But Apple’s new privacy rules changed everything. Users have to opt-in to allow apps to track their internet behavior, which they say yes to tracking about 25% of the time. Facebook warned investors about these trends when it reported second-quarter results, saying Apple’s changes could hurt its full-year growth.

Brands Look Elsewhere

Brands which are shifting advertising dollars to Amazon and away from Facebook point to the privacy changes as a big reason for their decisions. Vanity Planet, which sells home spa products, slashed the amount it spends on Facebook by 22% in 2021, with half of that going to Amazon. Meanwhile, Shinesty, an underwear company which sells direct-to-consumers, is also increasing the money it spends on Amazon and keeping its budget on Facebook the same as it was last year.

Facebook is still a dominant player in online advertising, but Amazon is looking more attractive to marketers. It will be interesting to see how this fight plays out in the digital ad market which is valued at $191 billion, and growing.

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