service division
The next big deal: Apple wants to bring more advertising to your iPhone
Apple CEO Tim Cook has expanded the service division into an important pillar of the group
© Apple / PR
At Facebook and other advertising companies, Apple recently caused sales to drop with measures against targeted advertising. Now the group is apparently planning to display more advertising on its iPhone itself.
It was a measure that shook the advertising industry: since advertising companies like Meta were no longer allowed to collect customer data across apps on Apple devices, their profits plummeted – while Apple celebrated itself as a protector of privacy. Now the iPhone maker seems to want to put more advertising on its devices itself. However, this is not necessarily a contradiction.
The step was first reported by Mark Gurman, who is usually well informed through his numerous insider sources, in the magazine “Bloomberg”. According to its sources, the group plans to gradually place advertising for individual providers and services in significantly more places on the iPhone operating system iOS. And getting paid for it. This fits in with the previous strategy of separating the revenue from pure hardware sales and expanding the share from the service business.
More ads on the iPhone
The fact that Apple is already making a lot of money from advertising should surprise many users. Finally, iOS doesn’t feel like being showered with ads. Apple takes about four billion dollars from it. They come mainly from advertising in the App Store: If you look for an app, suggestions for other apps appear, some of which Apple charges for. Apple also shows advertising in the stock app and the news app, which is not available in Germany.
If Apple wants to get its advertising income into the double digits, as Gurman claims to have learned, that shouldn’t be enough. According to Gurman, there will soon be advertising opportunities in other places in the App Store. He also thinks advertising for certain restaurants or shops in the map app is conceivable, as is also the case with the competitor Google Maps. He sees other opportunities for advertising in Apple’s e-book and podcast apps. He also considers a cheaper subscription to the Apple TV+ streaming service, financed by advertising, to be realistic. However, he rules out a return to Apple’s iAds advertising program, which was discontinued in 2011 and also sold advertising in third-party apps.
Apple relies on services
The greater interest in advertising is also said to be reflected in the fact that Apple’s existing advertising team has made itself heard more in the corporate network in recent months. The manager responsible for advertising, Todd Teresi, has recently reported directly to the head of services Eddy Cue, after having reported to his deputy Peter Stern for a long time. The fact that his team is successful is also seen at the top of the group. CEO Tim Cook and CFO Luca Maestru highlighted ad revenue as a “great” tool for app developers in the latest financial report.
Apple/PR
The service division, which also includes services such as Apple Music or the Fitness+ sports offering, has been a beacon of hope in the group for years. After years of record profits for the iPhone, the smartphone market has gradually reached saturation point in recent years. In addition to strengthening the Mac division with its own M processors, the steadily growing income from the service area is one of Apple’s most important measures to diversify its income. And thus to achieve less dependency on the iPhone.
Advertising industry hit hard
The fact that advertising revenue is now also being considered as a more important source of income contradicts Apple’s fight for the privacy of its users less than it first appears. Apple emphasizes that its own apps comply with the guidelines and do not collect user data outside of its own apps. That was exactly what was possible until the introduction of iOS 14.5 last year: The Meta subsidiary Facebook and countless other apps not only diligently collected data in their own apps, but also linked it with data from other providers – and almost left the user alone become glassy. That changed with the update: Users had to explicitly give apps permission for this type of tracking.
How strong The most recent financial report Metas showed that the advertising industry is dependent on this monitoring: the group’s revenues have collapsed by more than 16 billion dollars compared to the previous year. In addition to the competition from TikTok, Apple’s tracking blockade is explicitly blamed for this. Even the authorities are now interested in whether Apple is sufficiently adhering to its rules: the Federal Cartel Office announced in June that it wanted to investigate Apple’s handling of advertising tracking.
Sources: Bloomberg, Reuters, Federal Cartel Office