Apple looking to greatly expand ads on iPhone to compete with Facebook, Google, and Microsoft

Apple may be best known as the iPhone company and to a lesser extent the MacBook maker, but for investors, they could soon be known as the next big advertising platform.

According to a report from Mark Gurman over at Bloomberg, Apple has been testing the advertising waters with its first party apps such as News and Stocks but recently expanded its efforts to its TV+ service in front of live sporting events.

Despite its very vocal stance on customer privacy and aggressive efforts to quell third party advertising on its devices which have resulted in companies such as Facebook and Snapchat recording billions in lost ad revenue, it now seems Apple has cleared the board for its own pivot into diversifying its business portfolio with a significant stake in ad revenue.

When implementing its publisher revenue share, Apple was rather vague as to the distribution leaving many publications gun-shy on joining the service. In addition to its murky revenue share policies for ads in News and Stocks, Apple also leverages data from "its other services and your Apple account to decide which ads to serve," which ironically is what the iOS 14 update was intended to do for third party advertisers.

News and Stocks aren't the only places Apple staples ads at the moment as its very lucrative App Store places subtle suggestions in the Search and Suggested sections.

Unlike Apple's in-app iAds network, this new endeavor is raking in $4 billion in revenue, as of the latest earnings call, and ads group vp Todd Teresi looks to increase that to double digits soon.

apple_apple_news_update_july_apple_news_new_features_a_07152020_big

While Apple hasn't confirmed an official advertising flank, CEO Tim Cook recently called its ads efforts a "great discovery tool for app developers."

With that being said, Gurman predicts that Apple will continue to seed its first party apps and services with more ads, perhaps starting with Maps, Apple Books, Apple Podcasts, and continuing to push them on TV+.

The effort to add search ads to Apple Maps has already been explored internally. Such a feature would probably work similarly to search ads in the App Store. For instance, a Japanese restaurant could pay money to rank at the top of local listings when users searched for “sushi.” If you’ve used Yelp, you already get the idea.

In the books and podcast apps, publishers could pay for their work to appear higher in results—or in ads placed throughout the apps. Publishers have long been able to sell books inside of the Apple Books app, and subscribing to podcasts could be tied to advertising as well.

An ad-supported TV+, meanwhile, could offer older shows for a lower price—and help promote the paid offering.

It has been noted over the past several quarters by analysts and investors that Apple is aggressively attempting to diversify its company portfolio from the iPhone to digital goods and services.

By all accounts, Apple's pivot is working as planned but adding a multi-billion-dollar advertising leg could only help to continue to strengthen its stock.

When Microsoft shifted from the "Windows everywhere" company to "windows on something, but cloud everywhere," it began to break its decade long stock stagnation as well as increased its quarterly revenue intake for almost seven straight years.

We may be witnessing Apple's answer to what comes after the iPhone, and the start of its third act.

Share This Post:

Older

Two new Alienware gaming monitors to offer up to 360Hz refresh rate

Here is a look at what's coming to Xbox Game Pass later in August

Newer