A review of digital advertising in 2022, which has shifted from a Google-Meta duopoly to one where Amazon and potentially Apple are major forces
Reporters who cover the US military are alarmed by a lack of access right now. John Davidson / Australian Financial Review : Why Facebook's disastrous result could just be the start Robert / Transistori : Apple julkisti Tap to Pay -palvelun Tweets: @pandavalue : When is the rumor that $AAPL is looking to acquire $FB going to hit the wire? Harrison Stoneham / @jhstoneham : @PandaValue https://stratechery.com/... Apple could set up an auction-based advertising network that monetized on a per-install basis and run those ads within an Apple-controlled network that is available to third-party apps. It would basically be a better version of Facebook — well, in theory... Michael Kao / @urbankaoboy : All joking aside, this was a good competitive analysis of the muthazucka $FB. https://stratechery.com/... Eric Seufert / @eric_seufert : This point from @benthompson in today's (excellent) Stratechery update is salient. I will extend it with: keyword-targeted storefront ads negate the organic discovery value of a platform and can also facilitate the capture/transfer of brand equity. Some thoughts: (1/X) https://twitter.com/... Tomasz Frontczak / @frontczak : @eric_seufert @benthompson Same script: - affiliate marketers in 2005; - company with biggest mkt cap in 2022 Eric Seufert / @eric_seufert : 2/ When Apple rolled out Apple Search Ads, it introduced an interesting dynamic to the App Store: devs had to either bid on keywords relevant to their apps (including their apps' names!) or surrender the installs generated by those keywords (previously, for free) to competitors Eric Seufert / @eric_seufert : 4/ ASA also (inexplicably) allows for devs to bid on the names of competitors' apps. This commoditizes brand equity; the value that companies built through brand development becomes a commercial fulcrum that can be exploited by competitors — almost a liability. https://twitter.com/... Harrison Stoneham / @jhstoneham : @PandaValue Apple has all of the first party data. They could replace Facebook. Eric Seufert / @eric_seufert : 7/ So not only are these ad systems effectively a participation tax that undermines organic discoverability, they also diminish brand equity and allow it to be captured by competitors. Instead of playing offense, advertisers pay to play defense. Eric Seufert / @eric_seufert : 2/ When Apple rolled out Apple Search Ads, it introduced an interesting dynamic to the App Store: devs had to either bid on keywords relevant to their apps (including their apps' names!) or surrender the installs generated by those keywords (previously, for free) to competitors Ben Savage / @btsavage : “...oftentimes search ads feel like a rake on organic results that would have given you what you were looking for anyways. Facebook-style display advertising, on the other hand, is the foundation upon which an entirely new host of Internet-only businesses are built.” https://twitter.com/... See also Mediagazer
Context & Ripple Effects
The duopoly era ended not through competition but through Apple's own privacy lever: ATT stripped Meta of the tracking data its targeting ran on, and advertisers responded by shifting budgets to Google, Amazon, and TikTok as Meta's ad prices rose. The related coverage traces the full arc — from the early argument that limiting iOS ad tracking would push developers toward paid apps and IAP commissions, to publishers like Zynga building their own first-party ad tech that sits outside Apple's reach.
Stratechery's review adds the next move: Apple could run an auction-based, per-install ad network across third-party apps, and it has already been expanding inventory — App Store ads now reach the Today homepage and individual app pages, not just search. The question is whether the platform owner becomes a fourth ad giant on top of being the referee.
First-order effects
- Meta's ad business absorbs the immediate damage: ATT-driven price increases are pushing advertisers to reallocate toward Google, Amazon, and TikTok, directly shrinking Meta's share of the duopoly it once split with Google.
- Apple gains twice from the same change — ad inventory it controls (Search Ads, now expanded App Store placements) gets more valuable, and developers pushed toward paid models feed its commission business.
Second-order effects
- Advertisers' budget migration forces Meta to compete on price and measurement rather than targeting superiority, while Amazon's retail-media position makes it the structural winner of spend leaving the duopoly.
- Substitute networks emerge to fill the measurement gap: Stratechery argues Shopify should build its own ad network now that Meta is handicapped, and publishers like Zynga have already built first-party ad tech Apple cannot touch — fragmenting supply outside Apple's walls.
Third-order effects
- If Apple extends auction-based per-install ads into third-party apps, the industry structure inverts: the platform that broke the duopoly with privacy rules becomes a major ad seller itself, with the App Store as both distribution gate and ad marketplace.
- The pattern also carries a quality cost — the coverage links ATT-era disruption and a slowing market to a junk-ad epidemic, suggesting a fragmented, less-measurable ad ecosystem trades targeting precision for lower-quality supply.
The trend: Digital advertising is moving from a two-company duopoly to a platform-mediated market where Apple's privacy rules and ad inventory, plus Amazon's retail data, set the terms for everyone else.