Tim Cook, the CEO of Apple, recently answered a question regarding the company's ad business strategy briefly: "In terms of us selling ads, we have a search ads business across the App Store," he said last month in a second-quarter earnings call. A recently discovered job listing that mentions a demand-side platform suggests Apple has bigger goals in advertising. No one in the ad tech industry thinks Apple will be satisfied with just serving search ads inside the App Store.
According to ad tech leaders, the term "demand-side platform" (DSP) reveals Apple's expansive advertising goals. Ad tech experts weren't shocked, but Apple has kept its advertising business a secret. A DSP specialist's position entails "innovating on some of Apple's most sensitive and strategic initiatives," according to job postings for the position.
Our platform runs and delivers advertising auctions to match supply (customers) with demand (advertisers),” read the job listing.
Apple did not return a request for comment on the job post. Last week, Digiday reported on the job post, which has appeared several times on Apple’s career site since April. Apple’s career site reports it has more than 600 job posts in its Ad Platforms division.
Charles Manning, CEO of Kochava, a mobile ad measurement and attribution platform, stated, "I honestly do believe that Apple is going to widen those pipelines and create more options for marketers to buy media. "One might anticipate that [with search ads] there will be more than simply keywords; there will also be display, video, and linked ads."
Although it's uncertain how far Apple will go, Apple's mobile DSP might assist marketers in placing bids on programmatic ad space on applications.
An SSP, or supply-side platform, is what they're looking into, according to the CEO of a mobile ad network who spoke on the condition of anonymity. Apple may have "actually tied up every single piece of the ecosystem."
Apple's ad technology would be enhanced by an SSP to better serve the publishers, which are the app developers. Both demand side and supply side platforms are operated by the biggest online advertising companies, including Google and Amazon.
Apple does not disclose the amount of money it makes from advertising, but its fastest-growing business division is services, which includes advertising, subscription fees, and revenue-sharing from millions of app developers. Apple also offers Apple News, which features advertisements next to articles from well-known publications like NBC, CNN, Condé Nast, and Hearst. Apple TV is a property of Apple.
A Bank of America research analyst said last month that if Apple opens up advertising on Apple Maps and Apple TV, the company's advertising revenue could exceed $20 billion. The analyst also calculated that Apple generates $5.3 billion in income annually from its search advertising business. In the second quarter, Apple generated $83 billion in revenue, primarily from the sale of gadgets like iPhones, although services revenue increased 12% to $19.6 billion. In the meantime, Apple is seeing how businesses like Amazon are profiting from advertising, and even Netflix has changed its stance on advertising after collaborating with Microsoft to sell adverts on the streaming service.
Additionally, there have been indications of a slowdown in the economy, which has had an impact on marketing spending on advertising. It seems like Apple could easily close that deficit with a more sophisticated advertising platform.
Due to its strict stance on privacy and data, Apple has almost become an anti-hero in online advertising. Apple has been tearing apart the advertising technology infrastructure that advertisers rely on to target and track ads since 2017. Key data signals have been eliminated by Apple, including IDFA and third-party cookies on the Safari web browser. Customers using Apple's platform for apps must respond affirmatively to a carefully worded popup asking if they agree to the developer's tracking.
Facebook and Instagram's parent company, Meta, has been a strong opponent, alleging that Apple's data restrictions have hurt its business and will cost it $10 billion in revenue this year. Additionally, according to Meta, small firms suffer from the inability to advertise to and grow their local clientele. Since they can't accurately measure advertising, marketers cut back on spending.
Apple stated in its job listing that it was creating a mobile DSP to promote privacy while simultaneously assisting advertisers in reaching customers and developers in making money from their apps. According to the DSP job posting, "Ad Platforms takes a customer-centric approach to designing privacy-preserving and ethical advertising technologies, platforms, and algorithms."
Manning from Kochava claimed that Apple had always intended to increase its presence in advertising. Manning stated that "[Apple] wants publishers to monetize apps with advertising in a privacy-safe fashion, where no data exhaust is generated." Manning predicted that Apple will require DSP and SSP capabilities for it.
Apple's advertising strategy has been dubbed bold by Therran Oliphant, senior VP of analytics and technology at Essence Global, the media buying agency under GroupM, in a recent Twitter post. Watch how quickly they transition to offering targeting products inside App Store apps, Oliphant warned. "I'm sure they're going to start with Search Ads," he said. Apple-related tweets from Oliphant have subsequently been removed.
At the time, Oliphant tweeted that advertisers would "gobble up those ad slots like Joey Chestnut staring at a platter of franks on Independence Day."
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