Apple’s next billion-dollar idea? Showing more ads on your iPhone

Apple’s next ambition to boost revenues is to deliver more ads to your iPhone through placements in the App Store, Apple Maps, Apple Books and Podcasts, according to reports.

Bloomberg’s Apple-watcher Mark Gurman reports that Apple’s vice president for advertising, Todd Teresi, who joined Apple in 2012 from Adobe, wants to significantly expand the ad business beyond its current rate of $4 billion a year to double digits. 

Gurman reckons Apple is likely to expand search ads to Apple Maps, Apple Books and Apple Podcasts. Apple would be joining others streaming giants in creating ad tiers to their subscriptions, such as Netflix and Disney Plus. Apple could follow suit by bringing an ad tier to Apple TV+.  

Gurman sees opportunities for Apple to hit multi-billion-dollar ad revenue figures by replicating its existing model for helping developers solve discovery with ads in the App Store. The same could be done for its book and podcast apps. Meanwhile, an ad-sponsored Apple TV+ could offer a lower price point too as consumers begin rationing streaming subscriptions.    

Services generated Apple $19.6 billion in the three months to June 25 versus $63.4 billion for products over the period.   

In July, Apple expanded its ad slots beyond the Search tab and Search results to the App Store’s Today homepage and individual app pages, 9to5Mac reported, allowing iPhone owners opt in to ads shown in the News app, Apple Store, and the Stocks app. The new ad spots will appear in iOS 16, which Apple should release around September. 

But the company is awkwardly positioned to make a major push into online advertising. It has plenty of real estate through which to sell ad placements, yet Apple chief Tim Cook has staked Apple’s reputation on privacy and has been an outspoken critic of the ad-sponsored internet. In 2018, he called out Facebook, Google and big internet firms for becoming a “data industrial complex” that targeted users with military precision.   

Apple’s privacy protections include the use of random identifiers and a commitment not to target individuals or small groups but rather segments of 5,000 or more users. In 2021, Apple released the App Tracking Transparency reports to let users see what data from apps is used to track their behaviour.