How Apple ad revenue grew after it limited others

How Apple's ad revenue grew after it limited others

Apple’s ad revenue keeps growing, and the way it does things could be a sign of the future of the field.

Apple and digital ads have always seemed to be at odds with each other. Twelve years ago, the Cupertino company introduced iAd, a way to advertise on mobile devices that would only work in Apple’s ecosystem. That didn’t work. After six years, iAd was shut down. Apple, on the other hand, seems to be building its own advertising empire more and more these days.

Even though Apple doesn’t give specific numbers about how much money its digital advertising business makes, Bloomberg estimates that it makes about $4 billion a year. To give you an idea, a number like that is already close to Twitter or Snapchat, companies whose main source of income is advertising, and, at the time, would have been higher than TikTok.

Apple’s rise in the advertising market is mostly due to ads on its ever-growing App Store. This is because Apple made changes last year that made it easy for its users to stop many apps from tracking them. paid attention to this business. This change had a big effect on Facebook (now called Meta) and, to a lesser extent, Google. It caused prices to go up and the online advertising market to slow down.

Privacy as a selling point

Apple has long said that its products are better for privacy and security than Google’s Android and Microsoft’s Windows. More commercials and the fact that this upgrade boosted competitors have led to criticism. Also, who knows if it won’t initiate an antitrust inquiry at some time, as Mark Zuckerberg has requested. Apple plans to double its revenue in four years. To do so, it wants to recruit additional advertising staff and place adverts throughout its services and platforms.

According to the Financial Times, it is using different strategies, one of which is putting ads in more of Apple’s own apps, like Apple Maps, on iPhones and iPads.

Everything is part of a long-term plan that Apple has been working on for the past few years. The strategy aims to grow Apple’s income from its services sector. This includes advertising, the App Store, Apple Music, iCloud, Apple News, Apple TV+, and Apple Pay. The last quarter showed that this division brought in 19.6 billion dollars, or 25% of the total. It was only 13% five years ago.

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Meta has already worked out that Apple’s changes will cause them to lose $10 billion in ad revenue this year. The many scandals that Facebook had brought attention to the changes that Apple wanted to make. This seems like a good thing for users. Apple also used these changes to support its story about being a company that cares about privacy, which some people now criticize. Because, yes, Apple has also been able to protect a business that it is now betting on.

Right now, it looks like your most important ads are search ads in the App Store. Analytics firm Branch found that Apple’s internal search ads were responsible for about 50% of iPhone app downloads in the first half of the year. This was up from about 20% in April 2019, before the company made changes to protect privacy.

Apple ads that target vs. ads that track

Apple, on the other hand, wants to use a different model to figure out who its users are so that it can show them relevant ads that are also good for the advertiser.

Their ads don’t go to single people or small groups. Instead, they go to groups of at least 5,000 people. The company also doesn’t make profiles for each user in its apps and services. Instead, it says that random identifiers should be used.

Only time will tell if Apple will have to face monopoly investigations in this area in the future. What seems clear is that the future of this business and, by extension, the Internet as a whole will depend in part on how the advertising market changes and how interested people are in it.

More like this; Apple Music for Android now has Dolby Atmos and Lossless sound

Meta and Apple have different goals, which are becoming more and more incompatible. Facebook wants to get users on all devices and platforms and make money from them. Apple wants to bring people into its own world of hardware by marketing itself as a company that cares about privacy. The outcome of the fight could change the kind of information we see when we look at websites on the Internet and, as we say, the way most websites make money.

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