Apple’s Accelerating Ads Business

Chris Stokel-Walker, Wired, in an article headlined “Apple Is an Ad Company Now”:

Apple has sold ads inside Apple News and the App Store since 2016 but in recent months has shown a new determination to muscle into an industry dominated by Google, Meta, and Amazon. In June, Apple expanded the ways companies could pay to get in front of its customers’ eyeballs, allowing them to buy ads on the front page of the App Store. In August, Apple job postings suggested it was building a self-service platform for businesses to book ads to be served to customers through Apple products. This month, reports surfaced that Apple was courting potential buyers for ads on Apple TV+. What form those ads would take, such as pre-roll spots like those on YouTube or traditional TV commercials, is unclear.

Those moves all suggest Apple’s users will begin to see more ads inside its services and that the company will shift into more direct competition with ad-supported rivals such as Google and Meta. “Everybody’s been letting Google and then Facebook take all this money,” says Michael Cusumano, a professor at MIT Sloan School of Management. “For Apple to step in and say ‘I want a piece of this too’ kind of makes sense.”

The headline of this article is ridiculous. Even if Apple is getting four billion dollars in annual ad revenue, as estimated by Insider and cited by Stokel-Walker, that is a little over one percent of its 2021 revenue (PDF). One percent. Apple is no more “an ad company now” than I am a “professional bookcase salesperson on Kijiji”.

Just because Apple’s ads business is currently insignificant, it does not mean I like the direction it is heading.