Bloomberg’s reliable Mark Gurman reported in a recent newsletter that the Cupertino, California-based company has internally tested some expanded ad ideas, including search ads on Maps. These search ads would work similarly to the App Store, where developers can pay to have their apps appear in higher rankings for specific search terms. It’s less clear how Apple will serve ads to Podcasts or Books, but it could work similarly to search ads in the App Store. For example, publishers could pay to place their podcast or book higher in search results, or there could be special places in these apps to place ads. Apple TV+ could also see expanded advertising. Gurman notes that Apple has placed ads for its “Friday Night Baseball” deal with Major League Baseball (MLB) on TV+ — this could be the first of many ads on the platform. Gurman goes so far as to suggest that Apple could launch an ad-supported TV+ tier 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. The majority 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 pulled back and removed the ads from its pre-installed apps after tons of complaints from users and the media.
Expanding ads contrary to Apple’s privacy message
But expanding its advertising business could spell trouble for Apple. Users could complain about how Apple, generally considered a “premium” brand, is stuffing its $1,000+ devices with ads. However, a trickier thing 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 expanding its own ad network. ATT, for those unfamiliar with the feature, forces apps to ask users for permission to collect and sell data associated with their personal advertising identity. Typically, the first time someone launches an app, they’ll see a popup asking if tracking is OK. Social networks like Facebook (Meta) claimed that ATT cost them billions in advertising. While most people probably don’t care if Meta loses money due to ATT, it’s worth noting that the feature could also hurt smaller developers and companies. However, all of this ignores the fact that ATT doesn’t actually do much for users’ privacy, as pressing the “Ask the app not to track” button just prevents it from using the Apple-supplied advertising ID for tracking users on apps and websites. But that doesn’t stop companies from tracking content in their app or across a range of apps they control — for example, Meta can use data collected from Instagram to target ads on Facebook. Additionally, it doesn’t prevent apps from tracking users with other metrics, as studies find that some apps collect a ton of information about users’ devices to create a digital fingerprint of them and track them that way.
Apple apps don’t need to ask permission to track users
Beyond the ATT issues, critics have noted that Apple does not display the ATT popup in its own apps. The company claims this is because its system doesn’t follow users across apps and websites, something ATT aims to prevent. However, Gurman pointed out that Apple uses data collected from its other services and from users’ Apple accounts to decide which ads to serve. Technically, users can opt out of this by going to the Settings app > Privacy & security > and turning off ad personalization, but Apple will still collect some data about users for advertising. It will be interesting to see how this advertising push goes for Apple. There may be pushback from customers buying Apple devices expecting 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 implementing a system that effectively reduces the effectiveness of competing advertisers while simultaneously boosting its own ad network. Source: Bloomberg
