After Ruining Meta’s Business, Apple Now Wants to Do More Ads
In a new reveal, Apple recently announced that it will add ads to more pre-installed apps on iPhones, iPads and other Apple devices. This includes books, maps, podcasts and more. Additionally, the tech giant has internally tested search ads in Maps that can show recommendations when searching for nearby stores, restaurants or businesses.
But the question is, why now? Reports suggest Apple is expanding ads into new areas of the iPhone and iPad in search of its next big revenue generator.
Previously, Facebook and Google dominated the digital advertising market. Cut to 2022, Google, Amazon and Meta dominate the advertising landscape, with Apple and TikTok slowly infiltrating.
According to reports, the big three – Google, Amazon and Meta – are on a quest to absorb more than 50% of all advertising dollars. However, with the latest announcement, Apple is now looking to grab a bigger slice of the pie.
In the name of privacy
The irony is that Apple’s privacy efforts have stifled third-party advertising on its platform for the past few years. Earlier this year, in February, Meta (formerly Facebook) said Apple iOS privacy changes would cost $10 billion in lost revenue. “We believe the overall impact of iOS is a headwind for our business in 2022,” said Dace Wehner, Meta’s chief financial officer, during the company’s fourth quarter earnings report.
Meta was the only company to blatantly criticize Apple’s app tracking transparency policy, saying it’s more about the iPhone maker’s profit than privacy.
Apple advertising revenue
Global investment bank JP Morgan said Apple’s fledgling advertising business was well positioned to take advantage of its booming mobile advertising market. However, the opportunity is limited due to the emphasis on confidentiality.
JP Morgan senior analyst Samik Chatterjee said AppleInsider that the company has more than a billion iPhone users and is better positioned than other companies to take advantage of the “secular trend”. He added that the total market is expected to hit $400 billion by 2024, up from $288 billion in 2021. Apple could easily generate around $6 billion in revenue from mobile advertising in 2025.
Apple displays advertisements for its users on its Apple News and Stock apps, as well as on the Apple Store. In 2021, Apple generated ad revenue of around $4 billion in 2021, compared to around $300 million in 2017. However, ad revenue is quite tiny – less than 2% – compared to the overall revenue of the business – that’s $365.8 billion.
Apple’s app privacy tracking transparency for real?
In May 2021, when Apple rolled out its privacy update, it got a huge backlash from third-party advertising vendors and tech companies. However, it gives iPhone users full control over their data, where they can adjust what information can be shared, where they can share it, and when it can be backed up.
For example, if you are an iPhone user, you might have come across a few anti-tracking prompts – the “Ask app not to track” prompts.
So what happens when you don’t allow apps to track your activity? That is, it cannot display targeted ads. The transparency of app tracking has turned the data-driven mobile advertising industry upside down. Apple managed to cut off one of its streamers – “data”. Many companies are struggling to replace this data and are rethinking their strategies.
From a user’s perspective, the application tracking transparency policy seems like a good thing. But Apple now features ads on its platforms and apps seems to have opened up a whole new debate.