Over the weekend, Mark Gurman reported that we’ll soon see a lot more Ads on our iPhones. Ads in more places than you’re used to, inside more system apps and with different placement styles. Gurman states this is part of internal ambitions to drive ad revenue up into the double digits. But what’s really going on here? Let’s take a closer look.
Apple’s first foray into Ads
Nobody likes ads. And there are three camps of people when it comes to how we think about them. The first camp just outright hates adverts and can’t tolerate them at all. The second camp is sort of in the middle. They understand the necessity of ads to make specific experiences free (or at least less expensive) and might even whitelist certain websites with unobtrusive ad policies. The third camp is the average consumer. Largely oblivious to ads, ad choices, ad blocking technology and who might just accept the status quo. Powered with this knowledge, Apple tried to make the ad experience better in App Store apps via iAd.
iAd was a new advertising distribution platform. When a user saw an advert in an app, rather than get yanked out of their app and into the web browser, they would instead see a full-screen experience that they could effortlessly dismiss at any time. The ads used aesthetically pleasing layouts with interactive elements. To ensure a quality experience, Apple approved adverts and placements for consistency before users would ever see them. The process was very similar to the current App Store approval process in that respect. In further similarity to the App Store, developers kept 70% of the revenue generated from the ads while Apple took a 30% cut (the industry standard is 40%).
Unfortunately for Apple, iAd failed. Not because of the ads or the user experience. But because developers or more specifically, those serving ads, were used to being able to create ads of a much lesser quality experience. Ads that could be thrown together in a heartbeat and distributed to the largest possible audience with little intervention. Apple’s strict requirements for a quality experience and rules against targeting kids and so forth resulted in low uptake. Apple shut down iAd in 2016.
Apple’s current ad strategy
As it currently stands, users of Apple’s services see ads in the News app, Stocks (which contains business news articles) and the App Store. It isn’t unusual to see ads on news websites, even behind pay-walled content. The News app is an aggregator that contains stories from third-party websites. Naturally, those articles already have ads if you were to view them directly on their respective website. It’s how publishers can afford to operate. The news app just brings those articles into a unified location. Apple makes little to no revenue from ads placed inside articles but does share revenue for ads placed in the content feed. As for the App Store, the ads are recommendations for other apps. A pretty relevant and contextually appropriate choice.
As illustrated above, these are pretty unobtrusive. Particularly the example as shown in the App Store where Apple has complete control of the placement and the layout of the advert.
Looking ahead
According to Gurman, Apple plans to expand its ad placements into more storefronts such as the Podcasts app, the Books app and the iTunes Store. These ads would look much like the example shown above and to the right for the App Store. Furthermore, Apple will also look to include ads in the maps app via search results.
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.
Mark Gurman
Above and to the left, you’ll see an image of Google Maps displaying featured results of particular restaurant chains. These are paid ads. Over to the right is how paid ads appear in the search field of the App Store. I imagine that paid ads in Apple maps will look much the same as this, with a clear identifier making it obvious to users that this is indeed an ad.
Here’s why there is no need to panic
As outlined in this article, Apple has a track record of trying to create a useful ad experience. Both in terms of the placements and the relevant context of said placements, but also in how they’re designed. When you go into a store, for instance, it’s extremely commonplace to see advertisements for products or even special offers. Particularly in large stores such as supermarkets and department stores. Why would the App Store, the Podcast store or Apple’s Book store be different? It’s just a digital storefront rather than a physical location.
In regards to the maps app, while the same comparison can’t be made, if the ads are contextually specific to your search result, they might actually enhance your experience by surfacing useful, relevant results. And if presented in a way akin to the App Store, you may not even notice them as being adverts at all.
But how about privacy?
Apple does offer personalised adverts that are targeted to you. But what Apple does not do is share any information with third parties or track you across the web or in other apps. But let’s explore this some more.
Personalised Ads
By default, Apple advertising is personalised to you. The data that is collected by Apple includes the following:
- App Store search history
- App download history
- The publishers you follow in news or stocks
- The articles you view in the news app or stocks
However (and this is key), this data is only used to serve you ads if at least 5000 other people meet the targeting criteria. This data is jumbled and mixed with others in the subset to make it as least identifiable to any individual in the subset as possible.
If you prefer, you can also turn off personalised advertisements. In that way, none of this data is collected and you therefore won’t see ads based on relevance. You’ll still see ads but they’ll be more generic.
App Tracking Transparency
Naturally, some companies such as Meta are upset about Apple’s privacy-preserving App tracking transparency feature. When you open a third-party app, you’re required to give the developer your consent to be tracked. If you opt-out, they can’t hoover up all of your information across the web and in other apps. They don’t like it because it means that they can’t target you as easily which leads to less ad spending by marketing agencies.
Now you might be wondering if Apple asks for your consent to track you, much like all third-party apps are required to do. The answer is no. The reason why? Because Apple doesn’t track you at all. Not across the web or in third-party apps. If you choose to opt-in to personalised ads, again the data collected is not shared with any third party.
Put simply, Apple doesn’t need to ask for your consent because there is no tracking to consent to. As for ad targeting, you can turn it off if you’d like.
In Summary
Will we likely see more ads on the iPhone in due course? Probably. Will you notice them? Probably not in most cases. And I think it’s important to put things into perspective. You aren’t going to see ads popping up in the settings app, in iMessage, the health app and so forth.
You might see ads in places where it makes sense to see ads. In-store fronts such as the Apple Books store and the App Store. Places where you’re already shopping and it might make sense to show you product offers and recommendations that you might be interested in. Or you might see them when you search for restaurants in the Maps app, providing you with recommendations of places you might like to try.
Furthermore, you aren’t being tracked across the web and in apps, you can turn off personalised ads if you’d like and if you don’t like Apple’s move to add a few more ads in sensible places, you can always buy an Android phone. Google would never include an ad in the AndroidOS or target you.
(that was a joke by the way…)