Apple Advertising: The New Era of Digital Advertising

The Meta and Google duopoly in digital advertising may be coming to an end soon. 

Apple is looking to expand its advertising business, bringing ads to its native apps across iPhone, iPad and TV. Although nothing has been officially confirmed, Apple commentator Mark Gurman predicts some bold changes in Apple’s new advertising strategy. 

Apple’s advertising business is currently generating $4 billion in annual revenue, and the plan is to increase this to double digits. In 2021, we’ve already seen Apple’s ads business grow by 238%. With the new strategy to expand the ads business, achieving double digits may be closer than we think. 

So, whether you are a business owner or marketer, you might need to start considering Apple ads as part of your marketing mix. 

Here’s everything we know so far about Apple’s current advertising options, new advertising strategy and how it may shape the digital advertising landscape. 

Apple Advertising 

Apple moving into the advertising space is not something new. 

In 2010, iAd was launched as an attempt to help “developers and corporate marketers a way to incorporate sophisticated and compelling ads in iPhone applications”. Unfortunately, iAd was eventually discontinued in 2016 due to a lack of demand and data limitations. 

Apple has since stayed away from third-party app advertising and has focused its efforts on ads for first-party apps. This also better aligns with Apple’s position on data privacy. 

What currently exists? 

News and Stocks

The technology developed for iAd has been used for display ads in Apple’s News and Stocks apps. The supported formats include banners, video and native ads, and these ads are no different to those seen on other ad-supported websites. 

Apple TV+

Apple has also recently begun showing advertising videos on TV+. These are usually video ads placed at the beginning of a show or movie to advertise Apple Original or exclusive shows. Apple has also placed advertising for its “Friday Night Baseball” deal with Major League Baseball earlier this year. 

Apple Search Ads 

When it comes to Apple advertising, the most successful is undoubtedly Apple Search Ads which was first introduced in 2016. Search Ads allow apps to be easily discovered on the App Store, thereby increasing app downloads. 

How does it work? 70% of users already use the Search tab in App Store to discover new apps and 65% of app downloads happen after a search. Therefore, the placement of ads is crucial to the success of app user acquisition. 

Developers can bid on key search terms that are relevant to their app such as “puzzle” or “meditation”. Apple Search Ads will place the app at the top of the search results, above organically ranking competitors, for users who are already searching for keywords related to your app. 

Apple is dominating the mobile app marketing market, especially since its App Tracking Transparency (ATT) initiatives. According to Appsumer, in the second quarter of 2022, Apple Search Ads’ advertiser adoption grew by nearly four percent YoY to 94.8%, while Meta adoption declined three percent to 82.8%.

What to expect from Apple’s ads expansion? 

So, what’s in store for the new Apple ads strategy? It appears that Apple is making some big moves within their ads business unit. 

There have been recent Apple job ads seen hiring those with experience in designing and building customer advertising platforms, specifically for SMEs. Apple is looking for those who want to make a difference in how “digital advertising will work in a privacy-centric world”. 

Mark Gurman along with other Apple commentators and journalists have predicted the following: 

1. App Store 

In addition to Search Ads, Apple will soon expand ads to other places in the App Store. This includes the main “Today” tab – which is similar to a discover page. Developers and advertisers will be able to advertise their apps on this page based on users’ previous search and download history, without specific search term targeting. 

2. Apple TV+ 

Like many other streamlining platforms, Apple TV+ may also begin to introduce a cheaper, ad-supported plan. Currently, Apple TV+ is priced at $7.99 AUD per month and does not include any mid-content commercials. 

By introducing a cheaper option, Apple TV+ can not only reach a wider audience but also increase its advertising revenue. 

3. Maps

Another exciting new advertising option is the Maps app. Apple has already internally explored the efforts to introduce Search Ads to Maps. This will allow businesses to optimise keywords and use location targeting to boost discoverability. 

Much like Google Maps, businesses can pay to be listed as ads at the top of search results when specific search terms are used. 

4. Other Native Apps 

Apple will also continue to explore other opportunities for advertising across their native apps. This includes Apple Books and Podcasts. Publishers will have the opportunity to pay for their work to appear higher in search results or appear on discovery pages. 

Can Apple be a privacy advocate and ad giant at the same time?  

Last year, Apple introduced App Tracking Transparency (ATT) as part of its dedication to protecting and respecting its users’ privacy. However, as Apple has continued to expand its advertising efforts, there has been some criticism and pushback. 

ATT gives users the ability to choose whether an app can track their activity across other apps and websites for advertising or data-sharing purposes. A pop-up notification will appear in apps to confirm tracking permission, giving users more control over their data. 

ATT has significantly impacted advertising platforms that heavily rely on third-party data, especially Meta (Facebook). It is predicted that Meta will suffer a hefty $12.8 billion loss in revenue in 2022 due to ATT initiatives. 

For Apple to move deeper into ads seems ironic, and maybe even hypocritical. Some even suspect that the AAT was just a plan for Apple to push out Meta and other advertising platforms and dominate the market, as opposed to a genuine data protection initiative. 

So how will Apple maintain its position on data privacy while expanding its advertising strategy?

How are Apple ads different? 

Apple has stated that “privacy is at the centre of everything [they] do”, even when it comes to advertising. 

The current Apple advertising platform has been designed and built to protect users’ data and give them control over how this data is used. And Apple is confident that this does not impact the effectiveness of its ads.

User tracking & data sharing

You might notice that the ATT notifications do not pop up in native Apple apps. This is not only because Apple owns the iOS platform – Apple’s advertising platform does not track its users. 

Unlike other advertising platforms, Apple does not link user or device data collected from native apps with user or device data collected from third-party for advertising purposes. More importantly, Apple does not share any user data with other companies. 

This means that advertisers cannot target users based on behaviours and activities such as recent website visits or video views, which is a targeting strategy commonly used on advertising platforms such as Meta and Google. 

Segments vs. Individual users 

Another key difference is that Apple advertising tailors ads to segments, rather than individual users. Apple creates segments – groups of individuals who share similar characteristics.

Users can still receive targeted ads. However, the ads delivered to users are based on their assigned segments as opposed to their personal information. Also, to protect user privacy, ads will not be delivered if there are less than 5,000 people who meet the targeting criteria. 

Users stay in control 

At the end of the day, users stay in the driver’s seat. Apple is all about giving its users the autonomy to control their data and privacy. 

Users have the option to opt out of personalised and location-based advertising. It’s as simple as turning it off in their privacy settings. Users will still see ads, but the ads simply are not personalised. 

The shift towards first-party data 

First-party data is the future. Of course, Apple has a big role to play in this, but data privacy is a growing concern for users. 

A 2019 survey by Internet Society found that 65% of consumers reported feeling concerned about how devices collect and use personal data, and 63% of people find data collection “creepy”. This means that businesses need to adapt and prioritise their first-party data collection strategies ahead of 2023. 

Whether Apple’s commitment to privacy protection is genuine, or it’s simply part of a grand plan to dominate the digital advertising space – it’s all up to interpretation. 

What’s undeniable is that Apple is leading the change for digital marketing in a “privacy-centric world”. All we can do now is to prepare for this exciting new era in digital advertising. 

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