How Apple Is Integrating More Ads Into Its Platforms

Apple will be increasing the number of ads users see when searching its app store to coincide with the upcoming holiday season.

By Charlene Badasie | Published

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Apple is planning to launch new ad placements this holiday season. The tech giant’s current inventory focuses on the App Store with only one unit in the “Search” tab and one on the “Search Results” page. The move represents a significant expansion in the iPhone maker’s advertising efforts.

While there is official no word on where the new slots will be, rumors suggest the company plans to place them in the “Today,” and “You Might Also Like” sections. According to CNBC, some developers have already received an invitation to an online session focused on App Store ads.

Developer and Founder of Mobile Dev Memo, Eric Seufert shared an image of the invite on social media. “With new opportunities coming to Apple Search Ads, you can promote your apps across the App Store to engage even more customers this holiday season,” the email reads. The tech giant’s webinar is scheduled to take place on September 21st.

Speaking to CNBC about its new advertising inventory, an Apple representative said “Search Ads” provide opportunities for developers of all sizes to grow their business. “Like our other advertising offerings, these new ad placements are built upon the same foundation,” the spokesperson explained. They will only contain content from apps’ approved App Store product pages and will adhere to the same rigorous privacy standards.

However, the company says it won’t let developers target a specific app when bidding for product page ad placement. Instead, the ad suggestions will be relevant to each page, meaning that users will see ads for direct competitors. Interestingly, Apple’s ad expansion comes as its business faces increased scrutiny for making it difficult for third-party platforms to place ads in iOS apps.

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Reports suggest the App Tracking Transparency (ATT) feature caused a 40% increase in the price of in-app purchases, as developers are losing profits from advertising. Apple released ATT in 2021 to give users the option of sharing a unique ID with app developers, or declining to do so. Most iPhone owners choose not to share, which prevented online advertisers from accurately tracking the performance of their ads. At the time, the company said it made the change because of its corporate position on user privacy.  

The company also allows its own users to turn off Apple-personalized ads in the App Store. This prevents the tech giant from using data like account information and previous purchases to target search ads. As a result, 78% of users turned off personal ads. That’s the same amount of folks who choose to opt-out of the ATT sharing function. Advertising companies like Meta slammed the practice as anticompetitive and self-serving. Meta said Apple’s change could cost it $10 billion this year.

Meanwhile, the tech giant’s advertising revenue is reported as part of its services business, which also includes warranties, search engine licensing, App Store sales, and online subscription revenue. As such, Apple reported more than $68 billion in services revenue in 2021. Bank of America analyst, Wamsi Mohan also said the firm could generate about $5 billion of advertising revenue from search ads alone in 2022.