According to Bloomberg, Apple may spread its advertising to more of its first-party iPhone apps in an effort to increase income. According to the article, the corporation’s ad division earns roughly $4 billion in annual income, but the company aims to push it into the “double digits.”
Apple already displays advertisements in several apps, such as Apple News and Stocks. It also just announced plans to increase ad placement in the App Store. According to Bloomberg, the business is researching methods to introduce advertising to Apple Maps, which has so far distinguished itself from its competition, Google Maps, by not displaying advertisements. According to the rumour, Apple will also introduce adverts for Podcasts and Books into the stores.
Meanwhile, Apple has targeted other companies that target iPhone users with advertisements.
Apple introduced an update for iPhones last year that included a new popup that asked users if they wanted to allow apps on their phones to target them for adverts. The App Tracking Transparency privacy feature has upended the behind-the-scenes mechanics of many mobile adverts, particularly those that confirm if a transaction or download was made.
Most iPhone users clearly opted out, and the feature has caused significant hurdles to organisations ranging from Snap to Facebook to Peloton.
The new adverts may help Apple extract more value from iPhone owners.
Needham analysts stated in an Aug. 3 note that they believe Apple’s next large revenue stream is in the works.
“AAPL has best-in-class user data,” they said. “If it builds a DSP (demand side platform), AAPL can control how and where its data gets used, and can prevent data leakage outside their Walled Garden.”
Analysts believe Apple is also in the early stages of developing a new mobile advertising platform. They reported a “notable spike” in the company’s recruiting efforts for its Ad Platform, which was prominently displayed during the Cannes Lions advertising festival in June.
In Apple’s most recent earnings call, CEO Tim Cook and CFO Luca Maestri stated that the company’s ad business has some Covid-related issues, but that it is a “fantastic” discovery tool for app developers looking to promote their products.
According to Bernstein analysts, Apple’s Services division, which is mostly driven by advertising and the App Store, has seen a slowing growth rate for four consecutive quarters due to a shift in consumer spending.
They do, however, expect Apple’s ad business to rise as a result of increased ad loads in the App Store.
“Overall, we believe that at least 20% growth for Apple’s overall Advertising segment is attainable over the next few years,” they said.
(Adapted from BBC.com)