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Apple adverts, and making sure YOUR privacy is their BIG 1st priority

Apple has always insisted that our privacy is paramount, but will selling advertising on Apple Services change all that?

Apple adverts and our privacy

The difference

We all buy in to the Apple experience for varying reasons.

For some, it’s a lifestyle statement, and choice. For others, peer pressure. Then there are those for who Apple products are simply tools of their jobs. But, whatever brings us to Apple, there soon tends to be one common theme, or thread that gets a grip on us, quickly.

The Apple ecosystem is now a well healed phrase. It’s more than a phrase, though, it is a very real thing. Your ‘entry’ drug may be an iPhone. Then, liking the simplicity of the way that works, an iPad may come next, and an Apple Watch to track your day’s activities. And then, finally, your first Mac…

As you grow in to your Apple garden, there are certain things that are taken for granted. Seamless interaction, device unity, and the focus Apple’s products place on us being focused on our tasks through the day.

But, there is one silentbenefit of working in an Apple environment, and that is – privacy. It’s not the sexiest of subjects, but one that we kind of learn to take for granted pretty quickly.

Tough decisions

Only last week, Apple published their most recent set of financial results. Analysts had correctly predicted that the company would experience a downturn – and they were proved correct.

Those results covered the fourth quarter of 2022. Apple’s revenue was down approximately 5% year-over-year. Their declared revenue was $117.2 billion, compared to $123.9 billion in the same period last year. Gross margins reflected these postings, down from 43.8% previously, to 43% this time around.

Mostly, these fragile results were due to poor iPhone sales, in that crucial, holiday, fourth quarter. Due to the supply chain issues, iPhone 14 Pros were all but unobtainable during that period, which clearly impacted Apple’s numbers.

Wearables, AirPods, and Apple Watch, were also down, but they remained optimistic about the future. CEO, Tim Cook, saying he was ”excited about the long-term opportunity in the wearables category”.

Apple CFO Luca Maestri added that Apple Watch saw a record install base – in plain terms, the largest ever uptake of people buying their first watch (of which I was one), in that period.

But, through these troubled waters, there was one area of growth, and success for Apple – their Services business. It saw an all-time high revenue record of $20.8 billion. Paid-for subscriptions are now in excess of 900 million, meaning that Apple added another 150 million subscribers in the past 12 months.

Although good news for the company, should the alarm bells be gently ringing in the background for us, though.

Apple goes commercial

My attention was recently drawn to the news that Apple is actively searching for a top-flight, ad sales executive, and specifically, one with a background in the TV streaming arena.

You must have noticed how there are, slowly, more adverts creeping in to our everyday Apple experience. Ads were run, last year, in the inaugural season of Major League Baseball. The same is planned for the launch of their new soccer season, later this month.

Apple, certainly, has not been afraid to throw cash at their streaming TV platform. You don’t land stars the calibre of Harrison Ford, Will Smith, Russell Crowe, Steven Spielberg, and Martin Scorsese without laying down some seriously tempting deals. And, the money for those deals, has to come from somewhere. Subs can only do so much.

There are rumours that Apple is considering plans to create an ad tier for Apple TV +, which, I assume, would be cheaper than the current ad-free platform. The same sources, also believe that ads may soon come to Podcasts, and even maps, and weather as well.

Seeing growth in their services sector, has served as even more fuel to intensify their desire to expand upon their ad revenue potential. Indeed, the Financial Times reported that Apple is looking to push revenue from the current $5 billion, to somewhere closer to $30 billion – and all within only four years. That is a pretty serious, and ambitious growth plan.

The search

With such lofty desires, comes the need to have the right team in place. Clearly, the obvious area for Apple to gain ad revenue, quickly, is from their Apple TV + platform – of which I am a huge fan.

The search for the right person is, very much, in-play. There are even a couple of names out there, that are already being bandied around as possible candidates. David Lawenda, who’s currently with Paramount, as their chief digital advertising officer is one. The other front-runner is Peter Naylor, who, at present, heads up the ad team at Netflix, but has previous experience at other networks too.

Of course, bear in mind, that this push for the ad dollar, comes a year or so, after the Ad Tracking Transparency initiative play-book came in to effect. Developers now have to ask for consumers to agree to tracking, an initiative that had far-reaching, and damaging ramifications for Meta.

The value

Before agencies, and advertisers place their budgets, they are keen to have data, particularly on reach. Not much seems to be known what Apple TVs data is, and this could clearly prove troublesome, in trying to secure the big paydays they are after.

But, is this the point when Apple revert, from the commercial, runaway success that they are, and start to remember that their customers’ privacy matters?

Todd Teresi is the VP of Advertising Platforms at the company. He’s recently said that nothing would make Apple to decide to budge on protecting our privacy – “we won’t budge on the company’s refusal to share details about consumers”.

The words of Teresi, were further endorsed in a statement from Eddy Cue, (Executive VP of Services). Last month, I spotted a statement in which he said, ”We believe that our products and services should be made for everyone. We believe that privacy is a fundamental human right, and that our highest obligation to our customers is security.” 

Pros and cons

In Apple’s favour with trying to secure the top dollar, is the demographic of their audience, and, quality of content they now produce. Severance, Ted Lasso, Morning Show, Shrinking, Slow Horses…that quality content is their USP.

But, going against them is their relatively small reach. Advertisers clearly want their budget, and spend, to reach as many homes as possible. Apple’s reach is thought to be only around 20-40 million subscribers.

Less likely, but a possibility, is that Apple could look to deepen their relationship with their existing agency NBCUniversal. They are currently the ones responsible for selling Apple News, mainly, in the US and UK.

Not a jolly

There is one, annual, conference, where the big players, and ad execs, drink, eat, mix, and make merry – that is the Cannes Lions Festival of Creativity in June.

Previously, Apple has never had much of a presence in Cannes. This year that all that seems about to change, as they are prepping a large team of their A-list management, in readiness for the stellar event.

Wrapping up

I do hope they come through on this for us, and stick to their guns of our privacy coming first. It’s part of why I bought in to the Apple way, all those years back. I feel safe, and comfortable with them.

It would be super easy for the company to sell audiences to agencies, based on their interests around certain programming genres, like music, drama, or documentaries. Clearly, that is what the men in suits at the ad agencies crave, we can only hope that Apple doesremain in our corner, and are not tempted by a lengthy string of zeros on contracts. 

I can completely understand that they are a commercial entity, with a board, and shareholders, that demand results every quarter, of every year. But…

…am I naive in hoping for nirvana? Can Apple achieve the impossible, and sell ads, whilst protecting our privacy, and our data?

It’s a tough call, but if anyone can straddle this fence, and keep both sides happy, I back Apple.

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