The Impact of Apple's App Tracking Transparency on App Monetization

38 Pages Posted: 29 Apr 2022 Last revised: 8 Aug 2023

Date Written: August 08, 2023

Abstract

Recent years have been characterized by privacy regulations amid concerns of exploitative data collection and use, thereby setting boundaries to the data economy that fuels today's ad-funded Internet. An example is Apple's App Tracking Transparency (ATT), which necessitates explicit consent for tracking users outside an app and potentially undermines advertisement revenues. This paper studies whether and how app developers turn to payments as an alternative revenue source in response to a more privacy-preserving environment. For this, we primarily use rich web-scraped data to compare the monetization of more than 580 thousand apps active on Apple before and after the privacy change and across platforms with apps on Google in a difference-in-difference setting. The results suggest that the ATT brings back paid apps and strengthens the industry trend toward more in-app payments, yet the impact is very small. However, a possible long-run impact can be inferred by more pronounced effects for apps relying on Apple and tracking along with results on the extensive margin suggesting users to experience payments more often in the future.

Keywords: monetization, apps, privacy, tracking, advertisements, payments

JEL Classification: D04, D22, L29, O32

Suggested Citation

Kesler, Reinhold, The Impact of Apple's App Tracking Transparency on App Monetization (August 08, 2023). Available at SSRN: https://ssrn.com/abstract=4090786 or http://dx.doi.org/10.2139/ssrn.4090786

Reinhold Kesler (Contact Author)

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
1,071
Abstract Views
3,597
Rank
38,590
PlumX Metrics