iPhone 13 Pro
Source: Apple Inc.
Apple may expand its advertising to more first-party iPhone apps in an effort to increase revenue, according to Bloomberg.
The company generates about $4 billion in annual revenue from its advertising business but wants to grow it to “double digits,” according to the report.
Apple already shows ads in some apps, such as Apple News and Stocks. It also recently announced plans to expand advertising in the App Store. Bloomberg says the company is looking at ways to add ads to Apple Maps that, for example, have so far stood out from competitor Google Maps by not showing ads. The report says it’s “likely” Apple will also insert ads into its Podcasts and Books stores.
An Apple spokesperson was not immediately available to comment on the report.
Meanwhile, Apple has targeted other companies that push ads to iPhone users.
Last year, Apple released an update to the iPhone with a new pop-up asking users if they wanted to allow apps on their phone to target users for advertising. The security feature, called App Tracking Transparency, has improved the behind-the-scenes mechanics of many mobile ads, particularly those that confirm purchases or downloads.
It’s clear that most iPhone users have opted out, and the feature has presented huge challenges for companies from all over the world. Snap arrive Facebook arrive Peloton.
The new ads could help Apple get more value from iPhone users.
Analysts from Needham wrote in an August 3 note that they believe Apple’s next big source of revenue is advertising.
“AAPL has best-in-class user data,” they said. “If it builds a DSP (bridge-side platform), AAPL can control how and where its data is used and can prevent data leaks outside of their Walled Garden.”
Analysts also said they believe Apple is in the early stages of building a new mobile advertising platform. It said it had observed a “remarkable increase” in the company’s recruitment efforts for its Advertising Platform, and it featured heavily at the Cannes Lions advertising festival in June.
During Apple’s most recent earnings call, CEO Tim Cook and Chief Financial Officer Luca Maestri said the company’s advertising business was experiencing some difficulties related to Covid, but Cook said this is a “great” discovery tool for app developers looking to promote their apps.
Analysts from Bernstein say Apple’s Services business, which is largely driven by advertising and the App Store, has seen growth decelerate for four consecutive quarters as a result of the App Store suffering. accommodate changes in consumer spending.
However, they said they expect Apple’s ad business to grow because of the higher amount of ads on the App Store.
“Overall, we believe at least 20% growth for Apple’s overall Ads business is possible over the next few years,” they said.
Read more on Bloomberg.