WSJ: Apple seeks more growth in ad revenue with new network for mobile apps
We've already known about Apple's wishes to expand its Services revenue from the $30 billion it reported last fiscal year, to $50 billion by fiscal year 2021. But Apple also is looking to expand its digital advertising business according to The Wall Street Journal. To that end, the business daily says that Apple has discussing a new ad network with companies like Snap and Pinterest. The new venture would place advertisements on mobile apps in exchange for a piece of the action. Apple already raked in nearly $1 billion last year by selling promotional ads for the App Store's search tool.
Apple did not want to turn its customers into the product. That was said as the Facebook-Cambridge Analytic scandal first broke. At least 87 million Facebook users had their profiles used without permission.Should Apple follow through on its plans, it would catapult Apple into a very competitive arena dominated by the likes of Google and Facebook; the former owns 35% of the mobile ad market while Facebook is responsible for 25%. Google's take on its mobile ads is said to be 30% of the revenue. But Google and Facebook have produced complex user profiles allowing them to precisely target advertisements. Apple has been critical of this approach with CEO Tim Cook commenting in March that
Apple still uses some information for its App Store ads such as "name, address, age, gender, device use, app activity and music, video or book downloads." This way it can offer advertisers a certain demographic to promote their products to, such as iPhone users in a certain age group. The company says that it does not obtain user information from Siri and Apple Maps in this process. Apple's loyalty to its customers could make it harder for it to sign up advertisers in this dog-eat-dog business.
Those familiar with Apple's plans say that it would serve up an ad based on the topic being searched for by someone using an app that is part of Apple's network. For example, should a Snapchat user search for "NFL," he or she might see an ad for a ticket-reseller app.
Apple's last advertisement business, iAds, shut down in 2016. The service placed interactive ads on apps opened by iPhone and iPad users. It failed because Apple charged more than the competition, and was very selective in the types of ads that it accepted. Click on the video at the top of this article to see how BMW used iAd back in 2012.