Policies can change application business models

Posted by Christopher Farm on February 27, 2023 · 2 mins read

In recent years, the advertising-based monetization model for apps has been disrupted by privacy regulations from governments and policies from platforms such as the App Tracking Transparency (ATT) framework and Google’s cookie deprecation on Chrome browser. The ATT framework, introduced by Apple in iOS 14, requires apps to obtain explicit user consent before tracking advertising ids (the mobile cookie equivalent) and serving personalized ads. This has made it more difficult for app developers to rely solely on advertising for revenue generation because advertisers haven’t yet figured out how to bid effectively.

As a result, app developers are increasingly exploring alternative ways to monetize their apps in the current state of the market. One example of this is Twitter and Facebook’s recent move to charge for blue checks, which is seen as a way to diversify their revenue streams beyond advertising. This move may inspire other app developers to think outside the box and explore new ways to generate revenue.

The privacy policy is also forcing app developers to focus on creating products that engage broader audiences. User acquisition strategies that relied on precise targeting for specific product niches are much harder to exact and could lead to a transformation in the way apps are designed and marketed, with an emphasis on creating products that are accessible and useful to a wider range of people.

As governments around the world begin to make policies around advertising, it is important to consider its potential impact on app development. While regulations can help protect consumer privacy and prevent unethical practices, they can also restrict the way app developers create products for their users. Therefore, governments need to be careful to strike a balance between protecting consumer rights and allowing for innovation and growth in the app industry. Policies that end up stifling innovation and growth will lead to destroying markets and pushing more users to platform developed apps.