Apple plans to triple advertising

Apple is set to launch a new strategy to show ads in pre-installed apps on iPhones and other Apple devices in a bid to expand its advertising business.

of Bloomberg That’s what Mark Gurman claims the iPhone maker aims to triple its ad revenuecurrently about $4 billion a year, pushing it into “double digits.”

Gurman says the company has already tested the inclusion of sponsored results alongside search results in the Maps app, similar to the App Store search ads program.

He speculates that Apple may have plans to show ads in other apps as well, including Podcasts, Books and Apple TV. The latter will be via a subscription model that will include an ad-supported tier in exchange for a lower monthly fee, similar to new moves by streaming rivals.

This is a significant change from Apple’s previous approach, which focused on hardware to generate revenue.

Apple’s hardware sales have slowed over the past five years, prompting the company to focus on the revenue-generating potential of its services divisions, which includes advertising.

Apple announced iAd in 2010, which allowed app developers to use Apple’s banner ads instead of those from Google AdMob and others. This was the company’s first foray into the advertising sector, although iAd was mostly unsuccessful; the company shut it down a few years later.

Last year, Apple faced criticism for trying to grow its own ad business while crippling the third-party ad market by introducing privacy features like App Tracking Transparency (ATT).

Using ATT, Apple customers can choose whether apps can track them across websites and other apps. This feature is crucial for advertisers who want to collect data and subsequently deliver more targeted advertising.

ATT proved to be a major blow to both large and small businesses. Meta and Snap, for example, claim to have lost billions of dollars as a result of Apple’s privacy changes.

Given the increased privacy ATT affords users, Gurman described the company’s plan to expand its advertising business as “ironic.”

Apple already shows ads in certain apps, including Apple News and Stocks, and recently revealed its intention to increase ads in the App Store.

Gurman mentions the possibility of advertising on Apple TV Plus and claims that Apple could announce a cheaper, ad-supported tier similar to Netflix and Disney Plus plans.

Needham analysts said in an Aug. 3 report that they believe advertising will be Apple’s next significant source of revenue.

“AAPL has best-in-class consumer data,” they said.

“If it builds a DSP (demand-side platform), AAPL can control how and where its data is used and can prevent data from leaking outside their walled garden.”

Experts said they believe Apple is just beginning to develop a new mobile advertising platform.

There has been a “noticeable uptick” in the company’s recruitment efforts for its advertising platform, they say, adding that this was clearly visible at the Cannes Lions advertising festival in June.