Advertising was not Apple’s business model. He didn’t need it: he already had his iPhone and his services, right? No. In Cupertino, they have made changes to iOS that protect the privacy of users, but also (surprise?) Boost Apple’s advertising business. That division is growing so much in revenue that Tim Cook and his boys have decided to double their number of employees. There must be a reason.
App Tracking Transparency was just the beginning. This technology, which arrived with iOS 14.5, allows users to decide whether or not applications installed on their device can track their activity in other applications and on the Internet to display targeted advertising. A priori it seemed great as a measure to protect our privacy, but…
Apple advertising for Apple. But that measure was a frontal attack on Facebook or Google, whose advertising models are based on being able to track that user activity. With Apple closing the doors to them on iOS/iPadOS devices, things were getting very raw for them, but fantastic for Apple. The result? Apple Search Ads, its advertising division, was growing like foam.
Hey, the ads give a lot of money. Apple seems to have suddenly realized that advertising is one of the juiciest segments of the technology market. One that generates 400,000 million dollars a year in income, which already supports giants like Facebook or Google and which could now also begin to be a fundamental component of Apple’s income.
As the Financial Times reported, in the early 2010s, Apple was raking in a few hundred million dollars. According to Evercore ISI, they will raise 5,000 million dollars this year and it is expected that in four years they will raise 30,000 million dollars.
More wood, this is war (from the public). The Cupertino company had about 250 people working in its advertising division. On the website dedicated to Apple job offers they now expect to hire another 216 people for that division. Double the number they had up to now, and four times the 56 they were looking to hire at the end of 2020. At Apple “he has disputed the figures” to the FT, “but he has not wanted to give more details.”
Still far from Google and Facebook. The former generated $209 billion in advertising in 2021. Facebook generated $115 billion. Apple may still be a long way from those two giants, but Tim Cook’s company has much more important sources of income (for now). However, the services (App Store, iCloud, Apple TV+, Apple Music) are becoming more and more relevant and the company is making good use of that trojan horse called the iPhone to expand both these services and, soon, advertising.
Get ready for more announcements on the iPhone. In 2018 Tim Cook said “We could make a ton of money if we monetized our customers. If our customers were our product. We have chosen not to do that.” It may not have been then, but everything indicates that the presence of advertising, for now, limited to some apps (App Store, News, Stock Market) will increase significantly and, for example, expand to other apps such as Maps, Books, and Podcasts.
Watch out Apple. Advertising brings infamous amounts of money, and Apple can control how and where to display it. The privacy argument is working for now because the company has always been able to make the case that its business model was not that, but that growth poses threats.
As Check My Ads’ Claire Atkin said, “If Apple if Apple suddenly goes into that realm, it’s not going to have that competitive advantage [of not having that business model as its focus].” His reputation could be called into question, but as another market analyst said, when it comes to advertising, “Apple is the sleeping giant.”
Sharlene Meriel is an avid gamer with a knack for technology. He has been writing about the latest technologies for the past 5 years. His contribution in technology journalism has been noteworthy. He is also a day trader with interest in the Forex market.
