Apple plans to unveil new spots for App Store ads by the end of the year

Apple CEO Tim Cook holds the new iPhone 14 during an Apple event at its headquarters in Cupertino, California on September 7, 2022.

carlos barria | Reuters

Apple plans to release new ad “placements” as early as the holiday season, according to a message sent Tuesday to developers inviting them to an online session to encourage them to buy ads.

The new spots represent a significant expansion of Apple’s advertising inventory, which is focused on its App Store. In recent years, Apple’s advertising inventory has been limited to one unit in the App Store’s Search tab and one on the search results page.

“With the new opportunities offered by Apple Search Ads, you can promote your apps on the App Store to engage even more customers this holiday season,” according to the post, which was job by Mobile Dev Memo founder Eric Seufert and confirmed to CNBC by a developer who received the invite.

The message to developers didn’t specify where the new ad placements would be offered, but in July Apple announced that it planned to expand its menu with an ad unit on the Today tab, which is the front page of the app. ‘App Store, and another sponsored unit on the application product pages under the “You may also like” banner.

“Apple Search Ads gives developers of all sizes the opportunity to grow their business. Like our other ad offerings, these new ad placements are built on the same foundation: they will only contain content from apps’ approved App Store product pages and abide by the same rigorous privacy standards,” an Apple representative told CNBC.

The inventory expansion comes as Apple’s advertising business comes under increased scrutiny.

Apple’s advertising revenue is reported as part of its services business, which also includes warranties, search engine licensing, App Store sales and online subscription revenue, among others. Apple reported more than $68 billion in services revenue in 2021.

Bank of America analyst Wamsi Mohan estimated in July that Apple could generate $5 billion in advertising revenue from Apple Search Ads alone in 2022.

In 2021, Apple released App Tracking Transparency (ATT) to give iPhone users the option to share a unique identifier with app developers or opt out of sharing it. Most iPhone owners choose not to share, which prevents online advertisers from accurately tracking the performance of their ads.

Apple says it made the switch because of its corporate stance on user privacy. It allows its own users to opt out of personalized ads by Apple on the App Store and to prevent Apple from using data such as account information and previous purchases to target search ads. 78% of users opt out of Apple’s personal ads, a rate similar to some estimates of users opting out of ATT.

Advertising companies, including Facebook’s parent company, Meta, have called ATT anti-competitive and selfish. Meta said changing Apple could cost it $10 billion this year.

Lance B. Holton