Looking at the Future of Apple’s Advertising Business

Summary: Curious about the future of Apple’s digital ad business? Then check out some of our predictions for Apple in 2023 (and beyond!)

It might have flown a bit under the radar, but The Financial Times recently reported that Apple is pushing to substantially grow its ads 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 openings for its ad platform business, which would nearly double the size of its current infrastructure. It’s estimated that Apple likely earned around $5 billion in ad revenue in 2021 and could grow to upwards of $30 billion annually by 2026. This wouldn’t be enough to overtake Google or Facebook, but Apple has an unfair advantage going forward.

Some Background

Do you recall 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 across their mobile devices. This had previously been Meta’s “secret sauce” and accordingly dealt a substantial blow to their ads business. In 2022 alone, Meta is anticipated to lose upwards of 10 billion dollars because of this update.

It’s not a surprise that, seeing the writing on the wall, Google has started planning for a cookie-less future for themselves and their Chrome browser, with more privacy updates coming to Chrome by the end of 2024.

Apple’s Advantage

Unlike Meta or Google, Apple has the tremendous business advantage of owning the rails of its entire product ecosystem. And they do an excellent job of keeping customers engaged with new products and services! Whether it’s hardware (phones, tablets, computers) or software (Safari, The App Store, Apple Maps, Apple TV, Apple Arcade), Apple owns all of this user data and doesn’t have to rely on third-party cookies or permission to obtain it.

How will this factor into their ads platform strategy as they scale and optimize? What changes will we see to the user experience of Apple products? It’s probably too early to say either way—but in my view, here are some things to keep an eye on:

Local Search

• In 2020, 93% of all consumers used online searches to find a local business, and 42% of local searches involved clicks on the Google Map Pack.
• According to Bloomberg, Apple will start running ads in Apple Maps sometime in 2023.

Display Remarketing

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

Augmented Reality (AR) / Virtual Reality (VR)

• It’s long been rumored that Apple aspires to launch its own AR/VR headset in addition to Apple Glass and give Facebook’s Oculus and Microsoft’s Hololens a run for their money.
• Depending on their functionality, this could be a tremendous opportunity for brands to leverage mixed media to attract customers in various ways.

Search Engine Marketing

• I’ll admit that this one is more of a long shot (and since I’m writing this, please allow me to indulge)—but what if Apple decided to go after Google with its own proprietary search engine? With all of Apple’s data on its customers, it could generate search results that are more highly contextualized and relevant than anything currently in 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. Granted, the web search results currently redirect to Google—but is this an early sign of things coming?

Source: https://www.macrumors.com/how-to/remove-home-screen-search-button/

Why This Should Matter to You

Over the years, Apple has made a point to burnish its reputation as a guardian of user privacy. So how will they work with brands and marketers to leverage the data within their vast user ecosystem ethically? Will they implement a CPC (cost-per-click) model similar to Google? If so, will they charge marketers a premium to create highly targeted ads backed by troves of customer behavioral data and interests?

Make no mistake; Apple is absolutely making the right call in placing a big bet on its ads business. Frankly, it’s a little surprising that they haven’t done so already. At a time when Meta is looking a bit wobbly, and Google is struggling to map out a practical post-cookie future, it’s certainly something to keep an eye on over the next few years.

Have some questions? Make sure to get in touch with the experts at WSI!