Apple Plans to Expand Digital Ad Business with New App Network

Snap and Pinterest May Participate

Apple is looking to venture into the crowded digital ad space by creating a network that would place ads across various apps. The tech giant has reportedly met with companies, including Snap and Pinterest, about participating in the network.

This ad plan directly correlates to the struggling company’s dipping iPhone sales and lower than expected growth for its other product suites including the HomePod. If well executed, this network could offset some of that slow growth and help Apple maintain its spot at the top of the tech company food chain.

Back in 2010, Apple attempted to rev up an ad business with iAd. This network, created to sell ads within apps on iPhones and iPads, failed to attract marketers due to its high ad prices and ad restrictions. It formally shut down on December 31, 2016.

After this lambasted blunder, Apple launched a differentiated ad product which included search and discovery based ads. These app install ads, dubbed ‘Search Ads’, are still in effect today but the ad product doesn’t come close to matching those of Google and Facebook, which have come to dominate the ad market with a combined 60% market share.

Apple Squares Up Against Facebook and Google

Apple has not said when the ad network will kick off but they plan on sharing revenue in a varying split with the participating apps. Details regarding the system’s functionality are sparse but based on information provided by the Wall Street Journal, ads pushed by Apple will be based on what users are searching for in apps like Snapchat and Pinterest.

For example, if a user searches for news in the Snapchat discover page, they may see Apple ads pushing news apps like CNN or the New York Times. If a user searches for recipes in Pinterest, they may see ads for various cooking apps.

It’s currently unclear how much user data Apple plans to use to target ads but, like Google, Facebook, and other ad platforms, Apple will need to make privacy a priority.

Various controversies surrounding user data and privacy, propelled mainly by the Cambridge Analytica scandal and the new online data law GDPR, have dominated the web landscape this year, forcing thousands of apps to flood user inboxes with their privacy policy updates.

As Apple merges into the digital ad space, they will need to be strategic in their launch and ensure that its privacy policies are transparent and fair.

Apple’s Rough Year

Ever since Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple in 1976, the tech company has become a behemoth. In the last thirty years, the Mac and iPhone creator has accumulated a massive and dedicated fan base and has been heralded as one of the world’s most respected and innovative producers of cutting edge tech devices. They pride themselves on it and have built their image around it. 

This is why its slightly concerning that the company is now turning its focus on selling services through its devices instead of actually selling and improving devices.

Over the past year, Apple products have failed to sell as well as they once did and the company has been criticized for not being as innovative. For example, the Apple HomePod, released last December as a competitor to Amazon’s suite of Alexa powered speakers, failed to deliver both in innovation and sales.

The general consensus towards the HomePod was that it was a fine speaker in terms of audio but the AI features left much to be desired. The latest iPhone model, the iPhone X, encountered more favorable reviews but it’s steep starting price of $999 resulted in lower than expected sales. The new, home-button free, device also came with a learning curve that may have deterred long time iPhone users.

Final Thoughts

Apple’s new ad system will surely help the company offset sinking sales in the short term but when it comes to long term growth, they’ll have to go back to the drawing board. If Apple wants to regain some of their innovative power, they’ll need to hone in on what made them pioneers in the first place; original, high quality devices that excite the general populous and improve drastically between each model.

For content marketers looking to expand their reach, this new ad network could be a positive new ad option. Apple may be in a sales slump but they are still highly respected, they have managed to keep hold of most of their fan base, and are still number one on Forbes Most Valuable Brands list.

Apple may not have the best track record with digital ad experiments but if they can learn from their mistakes, they may prove to be a worthy competitor to Facebook and Google and they may attract advertisers.

What do you think of Apple’s new ad network? Let us know in the comments.


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