Apple is working on expanding its ad business significantly so that it can achieve double-digit growth from its current revenue of $4 billion per year, effectivity tripling the number.
One way the tech giant could do this is by displaying more ads in its stock iOS apps like Maps and Podcasts. However, there are concerns that a ton of ads could take away from the premium experience Apple touts to offer within its ecosystem.
Apple’s ad business could extend to several native iOS apps including Maps and Podcasts
Currently, the tech giant displays ads inside of its New and Stocks app, as well as inside the App Store, across the iPhone, iPad, and Mac. App developers can pay for their apps to show at the top of the App Store. In addition, Apple has started including ads in its streaming service Apple TV+ for its “Friday Night Baseball” deal with Major League Baseball.
In the latest edition of his “Power On” newsletter for Bloomberg, Mark Gurman writes that Apple is looking to expand its ad business. Apple’s VP of advertising platforms Todd Teresi wants to increase the current $4 billion revenue the company is generating from its ad business to double digits.
Gurman believes that Apple will expand search ads to Maps. It could also add them to Apple Books and Apple Podcasts. In addition, he says that Apple TV+ could introduce an ad-supported tier, similar to what Disney+ recently announced.
The effort to add search ads to Apple Maps has already been explored internally. Such a feature would probably work similarly to search ads in the App Store. For instance, a Japanese restaurant could pay money to rank at the top of local listings when users searched for “sushi.” If you’ve used Yelp, you already get the idea.
In the books and podcast apps, publishers could pay for their work to appear higher in results—or in ads placed throughout the apps. Publishers have long been able to sell books inside of the Apple Books app, and subscribing to podcasts could be tied to advertising as well.
While the expansion of Apple’s ad business is likely to have a significant impact on its revenue, will consumers appreciate a ton of ads hounding them on several native iOS applications? Probably not.
There is also another thing to consider. Apple’s App Tracking Transparency framework led to companies like Meta, Twitter, and Snap losing billions in revenue. While that may not seem like a big deal, small businesses suffered too. Now, the fact that Apple wants to increase its profits via advertising too is more than ironic.
As of right now, we will have to wait to see how this story develops.