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Apple Ads May Become More Prominent As Hardware Sales Plateau

by George Mensah
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People may mistake Apple’s stance on advertisements from companies such as Facebook and Google for its complete opposition to advertisements. As a result, it may come as a surprise to all but the most ardent Apple fan that the company has its own advertisements, but the fact that they’re so discrete is a testament to Apple’s tasteful implementation. That could change dramatically in the near future, as the company is now reportedly aiming to grow its advertising business to double-digit revenue levels. Of course, given how Apple has effectively limited the powers of its would-be competitors, the story is bound to become a little more complicated, putting it in the role of a company that is abusing its position.

Ads have been present on Apple products, particularly the iPhone and iPad, for over a decade. They are currently only visible in the App Store when you search for specific terms, as well as in the News and Stock apps. Ads in the latter two are similar to regular ads, but App Store ads appear as promoted apps in spots paid for by developers or publishers.

Apple’s advertising platform is just one component of the company’s overall services business, which it has been working hard to expand over the years. Apple’s primary source of revenue has always been hardware sales, but this has recently begun to slow. According to Bloomberg’s Mark Gurman, the company is aiming to triple its ad revenue from $4 billion per year to double-digit figures, and it will take additional steps to achieve that goal.

Advertisements almost anywhere

According to the report, Apple is considering expanding its advertising presence to more apps, such as Maps, Books, and Podcasts. Businesses can pay for a spot in search results on Maps, which is a very profitable option. Books and podcasts, on the other hand, may be a bit more contentious, as users may find ads in these places to be intrusive and, to some extent, invasive. After all, most advertisements work by analyzing user consumption behaviors regardless of anonymity.

Gurman also believes that Apple TV+ is a viable candidate for new advertisements. Apple may offer a lower-cost ad-supported tier with a limited selection of content, similar to what Netflix is attempting. The jury is still out on whether that strategy will be successful in converting ad-tier subscribers into full-paying customers, but it is an option to consider.

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While expanding its advertising business appears to be fairly normal, it does place Apple in a precarious position in terms of public perception and government regulation. The company was both praised and chastised for its strict App Tracking Transparency policy, which disadvantaged many advertisers. Some of Apple’s advertising rivals may argue that with its more aggressive ad expansion plans, the company is simply laying the groundwork for its own ad platform, creating a potential monopoly that will allow it to dictate advertising terms in its favor. Given how frequently Apple has been accused of monopoly in its App Store, the accusation isn’t without precedent, but Apple could easily spin it as something critical.

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