Apple, which already sells search ads for its App Store that allow developers to pay for the top result, will expand its advertising business, Financial Times reports, citing “two people familiar with its plans.”
Hannah Murphy and Patrick McGee for Financial Times:
Apple now plans to add a second advertising slot, in the “suggested” apps section in its App Store search page. This new slot will be rolled out by the end of the month, according to one of the people, and will allow advertisers to promote their apps across the whole network, rather than in response to specific searches.
The expansion is the first concrete sign that Apple plans to enhance its own advertising business at the same time as it shakes up the broader $350bn digital ads industry led by Facebook and Google.
Apple’s forthcoming software update, iOS 14.5, will ban apps and advertisers from collecting data about iPhone users without their explicit consent. Most users are expected to decline to be tracked, dealing a huge blow to how the mobile advertising industry works. Apple has said the changes will improve the privacy of its users, but some critics have accused the company of hoping to boost its own fledgling advertising business.
Bernstein estimated that Apple currently earns around $2bn a year from search ads in the App Store, with 80 per cent margins. Apple also sells ads in its Stocks and News apps.
MacDailyNews Take: Selling an ad or two in a handful of first-party apps, which helps defray the costs of building, maintaining, and running them, is not comparable to monopolizing online advertising by siphoning users’ personal data without their knowledge, much less permission.
So I pay for a device, so as to not be the product, and advertisers are allowed to monetize me on the only store I’m forced to use?
And the legions cheered!