Apple can extend its advertising beyond its apps and services, including pre-installed iPhone apps like Maps, Books and Podcasts.
Bloomberg’s reliable Mark Gurman detailed in a recent newsletter that the Cupertino, Calif.-based company has internally tested some expanded ad ideas, including search ads on Maps. These search ads will work similarly to the App Store, where developers can pay to have their apps show up in higher rankings for certain search terms.
It’s less clear how Apple would serve ads to Podcasts or Books, but it may work similarly to search ads in the App Store. For example, publishers could pay to have their podcasts or books placed higher in search results, or there could be dedicated places in these apps to place ads.
Apple TV+ could also see expanded advertising. Gurman notes that Apple placed ads for its ‘Friday Night Baseball’ deal with Major League Baseball (MLB) on TV+, which could be the first of many ads on the platform. Gurman goes so far as to suggest that Apple could launch an ad-supported tier of TV+, similar to Disney+ and Netflix.
Apple currently displays ads within the App Store, the News app, and the Stocks app on iPhone, iPad, and Mac. Most of Apple’s apps and services remain ad-free, which has long been a point in Apple’s favor compared to other companies. Notably, Samsung finally relented and removed ads from its pre-installed apps after tons of complaints from users and the media.
Expanding ads inconsistent with Apple’s privacy message
However, expanding its ad business could spell trouble for Apple. Users might complain about how Apple, generally considered a “premium” brand, is stuffing its $1,000+ devices with ads. However, something more difficult for the company to navigate will be its self-imposed reputation for privacy, features like App Tracking Transparency (ATT), and how to reconcile all of that with the expansion of its own advertising network.
ATT, for those unfamiliar with the feature, forces apps to ask users for permission to collect and sell data tied to their personal advertising identity. Typically, the first time someone launches an app, they’ll see a popup asking if it’s OK to be tracked. Social networks like Facebook (Meta) claimed that ATT cost them billions in advertising. While most people probably don’t care if Meta loses money on ATT, it’s worth noting that the feature could also hurt smaller developers and companies.
But all of this ignores the fact that ATT doesn’t actually do much for user privacy, as tapping the “Request the app not to track” button only prevents it from using the advertising identifier provided by Apple to track users across apps and websites. But that doesn’t stop companies from tracking things in their app or in a set of apps they control; for example, Meta may use data collected from Instagram to target ads on Facebook. It also doesn’t prevent apps from tracking users using other metrics, with studies finding that some apps collect tons of information about users’ devices to fingerprint and track them this way
Apple apps don’t need to ask permission to track users
Aside from ATT’s problems, critics have pointed out that Apple doesn’t show the ATT popup in its own apps. The company claims this is because its system doesn’t track users across apps and websites, which is what ATT aims to avoid.
However, Gurman noted that Apple uses data collected from its other services and from users’ Apple accounts to help decide which ads to serve. Technically, users can turn this off by going to the Settings app > Privacy & Security > and turning off ad personalization, but Apple will still collect some data about users for ads.
It will be interesting to see how this advertising push works out for Apple. There may be pushback from customers buying Apple devices who expect a premium or privacy-friendly experience, but now they’ll have to deal with ads. I could also see companies like Meta raising potential antitrust issues with Apple by implementing a system that effectively reduces the effectiveness of competing advertisers while increasing their own ad network.
Source: Bloomberg