The last two weeks in a row I’ve been at weddings and weekends are my prime focus time to think through what I want to write about. Instead of trying to recoup lost time, I figured I’d write a triple-threat post where each part is tied together by a single behemoth, Apple, and the last three weeks of info.
So grab a coffee, sit back, and let’s talk about the largest company in the world.
You probably recognize the screenshot below after selecting one of the two options dozens, if not hundreds, of times over the last year or so. Apple updated their privacy to give its users “control over what [we] share”.
While many people at first glance were thrilled to stop sharing data, they had no idea what the second order effects would be both for themselves and for the companies that actually use that data. For those reading who selected “Ask App not to Track” in their favorite social media apps like Instagram, Twitter, etc., have you noticed that your ads have gotten either extremely specific or not relevant at all? And for those that selected “Allow”, have you not really noticed a difference? By asking your apps not to track data, you’ve taken your hat out of the proverbial “show me things that are relevant” ring and are basically anonymous on the apps. Congrats! But by doing so, the apps can only show ads that they knew were relevant to you before you stopped sharing, and if you wipe that, your ads will be even less relevant.
Companies big and small rely on these ads with their lives. While giants like Nike advertise on these platforms, there are also ten person startups just trying to get their name out there so you can buy their D2C Olive Oil, etc. What’s happened since Apple’s change is that the price of ad space has skyrocketed because the target audience has become harder to identify and smaller with less data. It also means that companies get less information back about who interacted with their ads and what they did from there. Businesses small and large therefore end up having to cut ad spend because it’s so expensive that it destroys their budget. Less money spent on ads is doom and gloom for platforms like Facebook, Snapchat, and others because that’s how they make their money! Remember - if you don’t pay for the product, you are the product. Snapchat, for example fell 43% last week! In its guidance, it mentioned that revenue would come in lower than initially expected for the rest of the year - primarily attributed to Apple’s privacy changes.
Granted, in a year with an ongoing recession, war, inflation, and more, Apple’s changes weren’t the only macro driver of Snap’s struggles. But Snap’s biggest revenue driver is ads. That won’t change soon. The same can be said for Meta, Pinterest, Google, and others. While us plebs won’t know if the move by Apple was a swipe at other tech giants or an attempt to reel in competition from ads and appear as the good guys…
For what it’s worth, I know very little about marketing, so please correct me if I got anything wrong above. I also am a shareholder in Apple and still think it’s a fantastic company. And this isn’t investment advice! Speaking of, onto topic number two…
Something brand new to me popped up on the Twitterverse and it blew my mind.
In plain English, Dan is asking how much of the long-term value of Apple (what investors value it at now) can be attributed to what investors think Google is paying to be the default search engine on all of our Apple products. If you see the screenshot below, you’ll see that it is, in fact, the default for Safari.
A smart person in the comments said between 12-15% of Apple’s total value can be attributed to Google’s payments for that default position. That shakes out to between $300-375B of value, not pocket change. (That’s not what Google pays, that’s what the estimated value over time is worth - Discounted Cash Flows are interesting). While we don’t know if that’s entirely accurate, it’s not unreasonable to assume that it’s a small price for Google to pay to keep Apple from building its own search engine. It’s a win-win for both parties, really. Apple has a 100% margin search engine business that requires little work to keep running, and Google has their demand sourced for them by all iOS users while keeping Apple’s continued world domination at bay. Although if Apple decides to sever ties after building its own search… whoo boy.
Google owns the demand when it comes to search. They are the ultimate aggregator and have essentially inserted themselves as a process step in between you and what you’re looking for. That’s what’s made them one of the most successful companies in the world. Google eats Microsoft’s lunch when it comes to search, which means that Apple does too.
(Flo Crivello)
Lastly, Apple announced at their WWDC22 that we can Edit or Unsend iMessages in iOS 16. That’s… fine, but usually I wouldn’t care enough to edit and am no longer in a position where I feel like I ever might need to unsend something. *knocks on wood*. But what was the most important announcement is that we’re FINALLY GETTING A MARK AS UNREAD OPTION. I can’t even begin the amount of times I’ve begun reading a text, bookmarked it in my head for replying later, and totally forgot. That will hopefully be completely solved later this year, even if it takes something weird called filters.
All the technological advances have been great, I love my home screen widgets and tapping the Apple icon on the back of my phone to use a flashlight. But you’re telling me no product or user research people heard “mark as unread” come up enough to prioritize that for like… iOS 12?? Something’s up there. But I digress, it’s without a doubt the most exciting update, for me, in a long time.