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Is Apple the new ad agency in town?

Having always preached a privacy first policy, are there changes on the horizon for adverts and Apple?

image courtesy of author

Needs must

Apple has historically been a financially sound company. With a net worth that will surely soon trip the $3 trillion dollar barrier, that pedigree is not about to change any time soon.

But a company, any company, does not grow to such a size by luck, or taking their boardroom eye off the ball. Times have changed recently, even for Apple. Their latest financial report was, flat, or, at best, only showing minimal signs of growth. Hardware sales are expected to slow down, reflecting global trends, as the cost of living crisis takes a cruel, firm grip. Add to that, COVID-related supply chain issues, the worries of a recession, and retail supply delays, and you can sense that the waters ahead for Apple, may be choppy.

Robust as they obviously are, the board know they need to look to react now. The answer they have come up with, is a little surprising, well, to me at least.

They seem to think more adverts is the way forward!

Collateral damage

Apple has apparently decided to take the decision to expand its advertising business. I know, I know, on the face of it, it flies against everything we have assumed that matters to Apple regarding their users’ privacy.

It was only last year, Apple launched a feature called App Tracking Transparency (ATT). Using ATT puts the consumer and user in control, of whether apps can track them across other applications and websites. Apple users were given a simple yes/no option whether they were happy to be tracked or not.

This method of tracking has historically been crucial to marketers in gathering data on our habits. The more they can track our online habits, the more tailored the ads we are served. And, the better suited the ads are, the more likely they are to make serious money.

Whilst applauding the arrival of ATT, on the other side of the commercial fence, damage has been caused, with many companies and platforms suffering financially as a result. The golden cash-cow was killed in one, deft culling.

The obvious victim was Facebook, or Meta, who have lost billions because of ATT. But, it is not only the massive corporations that have suffered at the hands of Apple. Many smaller developers have also felt the effects.

So, how is Apple about to suddenly subject us to more in app adverts, given their recent pledges?

Slow & subtle

Apple will not, all of a sudden, bombard us with pop-up ads at every touch and turn. The approach will be way more subtle, as you’d perhaps expect.

Apple is already using advertising in its News, Stocks, and App Store apps. In the case of the App Store, search results, are paid and supported by developers. Paying Apple to get their apps high on the search menu, results in revenue for the developers. This applies across platform to iOS devices and Macs, alike which gives Apple instant access to millions of users.

Part of the deal with Major League Baseball for their live, Friday night coverage, was to include ads in that service too. I can testify, there are countless ads in that slot – an annoying amount actually!

Whilst the paid search results in the App Store may actually help users, the ads in the News & Stock apps are less useful, and more what you’d expect on any commercial, news-based website.

Apple is known to be cagey about full disclosure of many of their business & commercial decisions. The holds true in this context. Some revenue from the Today tab in Apple’s News app does go directly to the publisher, but no one seems sure what the split is. And, in a surprisingly altruistic move, Apple lets publishers advertise within their stories too. What does surprise me, though, is even if you cough up your $10/month and subscribe to News+ the ads and links will still show up. Seeing ads pop-up, even behind a paywall, feels odd to me, and not native to the iOS, premium, experience.

Haven’t we been here before?

Apple has been in the ad trenches previously. Back in 2010, whilst Steve Jobs was still CEO, he announced iAd. iAd disappeared only a few years later, and sunk without a trace.

It is little known that Apple are already following you, and in some way, using your data. It seems so at odds, but, they are already monitoring your Apple account and various services, to decide what ads are best served to you.

You can largely opt out of this by heading to Privacy & Security > Apple Advertising. The uptake of iOS 15 users disabling this feature is over 70%, which kind of says it all! But, that is only 70% + of users that actually knew about the feature in the first place. Even when disabled, Apple will still have access to who your carrier is, what you click and read and also what device you are using.

And if you are wondering why Apple’s own ATT does not apply to themselves, and their apps, they’ll respond by saying;

“The system does not follow you across apps and websites owned by other companies.”

Makes you wonder where the Apple privacy bit starts to kick in, huh?

More display ads

Whilst some of Apple’s methods of advertising, as we have seen, have been subtle, display ads certainly are not, and more of those could soon be on the way. We’ll soon see display ads on the News’ Toady tab, and also developers download pages alike.

All we are now witnessing, is a result of some changes in the chain of command at Apple. The ad team, under ad VP Todd Teresi, has leveraged more control within the companies policymaking recently. He now reports directly to Eddy Cue, as he did with iAD a few years back. Earlier, I briefly mentioned last month’s earnings report. The ad side of the business was mentioned in it by CEO, Tim Cook.

Cook, although admitting that Apple’s ad business may face “some COVID related headwinds”, went on to say that it is “a great discovery tool for developers.

Quite the endorsement from the man at the top.

The future

Teresi is keen to stamp his mark, and quickly.

Ads are currently generating a handy $4 billion annually to the Apple balance sheet. Teresi is keen to see that more than double, with his sights set on an annual turnover of over $10 billion.

If that is to happen, we can expect to see some pretty major changes in Apple’s use of ads.

They already have multiple platforms available to them, that would suit the planned advertising business model. Apple Books, Podcasts, Maps, and Apple TV+ must surely be in the crossfire.

It’s easy to see how this could work. With Maps for instance, you are on holiday, and finding your way about a strange town, and you want to find a child-friendly restaurant. A paid for search from such a restaurant, would work a dream. The Podcasts and Books apps are just as easy to imagine ‘benefitting’ from paid search results.

It’s in our hands

Oddly, Apple still listens and watches our habits – in a good way. If proof of that were needed, then just look at the SD card slot coming back to the MacBook Pros.

If they start to serve more ads across Macs and iOS devices, and see a massive rejection to the route they are taking, they will notice.

At this point, Apple are exploring all options to generate future revenue. Whether that comes from the slowdown in recruiting, or winding-back in buying out smaller companies, they will leave no stone unturned.

Try hard as they might with running ads through our native Apple services, if we all vote with a lack of clicks, the model will be dumped as quickly as iAd a few years ago.

You can’t blame them for trying every avenue, but we DO have a voice in how this plays out.

Much like with general elections – don’t waste your vote!

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