Apple is ramping up the advertising side of its App Store business, according to the Financial Times.
The company currently sells App Store ads, allowing developers to pay for top spots. But soon Apple will roll out another advertising spot for sale in the “Suggested” apps section. This will allow developers to more widely promote their apps, rather than having them show up only in response to certain search terms.
This move comes at a contentious time for advertising and the App Store.
iOS 14.5 will ban apps and advertisers from collecting data about users without gaining their explicit content. This is going to be a big headache for the likes of Facebook, which has already protested Apple’s changes. Apple will reportedly roll out its new advertising slot at the end of the month. The FT cites two people with knowledge of Apple’s plans.
Change comes at a critical juncture
Apple CEO Tim Cook has frequently talked about privacy and his dislike of the ad-driven business model that has led companies like Facebook to offer services for free, while selling user data to generate profits. He most famously told interviewer Charlie Rose that he was opposed to the data-selling business model, saying that if a company doesn’t charge customers for a product, they are the product.
What Apple is doing here is different, since it doesn’t intrude on user privacy. However, it also shows that Apple is ready to profit at the same time its changes are disrupting rivals. As the FT notes:
“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.”
With targeted ads likely to be hit hard by the upcoming changes, recommendations through the App Store could become even more critical. How that will sit within the broader context of antitrust concerns about Apple’s dominant position, especially with the App Store, remains to be seen. If the FT report is correct, there are some interesting optics at play here.
What do you think about Apple upping its focus on the ad business? Will this prove another lucrative revenue stream or an antitrust headache — or both? Let us know your thoughts in the comments below.
Source: Financial Times