Looking at the Future of Apple’s Advertising Business

It may have slipped under the radar a bit, but The Financial Times recently reported that Apple is aiming to substantially expand its advertising business in the coming years.

So how do we know this if Apple hasn’t said anything publicly? According to LinkedIn, Apple has over 200 job openings for the ad platform business, nearly double the size of its current infrastructure. Apple is estimated to have likely made about $5 billion in ad revenue in 2021 and could grow to $30 billion a year by 2026. It won’t be enough to overtake Google or Facebook, but Apple has an unfair advantage going forward.

Some background

Do you remember the iOS 14.5 software update from about a year ago? This allowed iPhone and iPad users to block third-party apps like Facebook from tracking and monitoring their behavior on their mobile devices. Previously, this was Meta’s “secret sauce” and, accordingly, dealt a significant blow to their advertising business. In 2022 alone, Meta is expected to lose more 10 billion dollars because of this update.

Not surprisingly, after seeing the writing on the wall, Google began planning for a cookie-free future for itself and its Chrome browser, with more privacy updates coming to Chrome by the end of 2024.

Apple advantage

Unlike Meta or Google, Apple has the huge business advantage of owning the rails of its the whole food ecosystem. And they do an excellent job of attracting customers with new products and services! Whether it’s hardware (phones, tablets, computers) or software (Safari, App Store, Apple Maps, Apple TV, Apple Arcade), Apple owns All this user data and should not rely on third party cookies or permission to receive them.

How will this impact their ad platform strategy as they scale and optimize? What changes will we see in the user experience of Apple products? It may be too early to tell one option or the other, but in my opinion, here are some things to look out for:

Local Search

  • In 2020 93% of all consumers used an online search to find a local company, and 42% local searches included clicks on Google Map Pack.
  • According to Bloomberg, Apple will start advertising on Apple Maps sometime in 2023.
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Display remarketing

  • Many times a customer will browse Apple Books, Apple TV, and the Podcasts app without making a purchase or selection. Can we see a future where these searches are remarketing to Safari (Apple’s browser) users?

Augmented Reality (AR) / Virtual Reality (VR)

  • Rumors have long circulated that Apple is aiming to release its own AR/VR headset to complement Apple Glass and compete with Facebook’s Oculus and Microsoft’s Hololens.
  • Depending on their functionality, this could be a great opportunity for brands to use mixed media to reach customers in a variety of ways.

Search Marketing

  • I’ll admit that this is pretty far off (and as I write this, please allow me to indulge), but what if Apple decides to go after Google with its own own search engine? With all of Apple’s data about its customers, it can generate search results that are more contextualized. And up to date than anything currently on the market.
  • And, in case you missed it, the recently released iOS 16 software update has prominently added a search bar to the home screen of every mobile device. Sure, web search results are currently being redirected to Google, but is this an early sign that something is coming?

ios search button (1)Source: iOS 16: how to remove search button on home screen

Why should it matter to You

Over the years, Apple has tried to build on its reputation as a privacy advocate. So how will they work with brands and marketers to use data ethically across their vast user ecosystem? Will they implement a CPC (cost per click) model similar to Google? If so, will they charge marketers a premium for creating highly targeted ads backed up by lots of customer behavior and interest data?

Make no mistake; Apple is absolutely right to bet on the advertising business. It’s honestly a bit surprising they haven’t done this yet. At a time when Meta is looking a bit wobbly and Google is struggling to map out a practical post-cookie future, this is definitely worth keeping an eye on over the next few years.

Have questions? Be sure to contact WSI experts!

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