We should prepare now for more Apple on our media plans
Strategy LeadersApple’s ad business is rarely discussed but has the potential to become a major player. Advertisers should proceed with caution.
$84.1bn. That was the deeply impressive figure which appeared earlier this year under ‘Revenue’ on Apple Inc.’s 2021 3rd fiscal quarter financial report. A sizeable achievement to say the least, considering the 36% year-on-year increase to get there and the small matter of a global pandemic.
But tucked away amongst the labyrinth of figures making up these results, dwarfed by those from iPhone sales, there was something else happening, something which hinted ever so subtly that the winds of change may be starting to blow across the digital ad landscape.
I’m referring to the revenue generated by Apple’s advertising business, which has tripled in the past six months and is expected to generate revenues of $5bn this year, primarily from the Search Ads offering.
And, with the now infamous iOS 14 update placing considerable limits on ad targeting and monitoring iOS users, that annual figure is forecasted to hit $20bn within three years.
But what could these lofty ambitions mean for advertisers?
Certainly, from a media planning perspective, if Apple’s predicted growth in this space continues, it will inevitably lead to an increased presence of Big Tech on our plans – something that has already become all too familiar, but has not been without its challenges, from questionable measurement to ad fraud to brand safety concerns.
Apple will, therefore, have a lot to prove in order to secure its seat at the table, particularly since this is their second foray into digital advertising.
However, this does not mean that the boffins there aren’t potentially capable of producing a very attractive digital planning and buying solution, spanning well beyond their current paid search offering in the App Store. Such a solution, if done well, could prove particularly tantalising for brands and agencies alike.
What Apple could potentially offer
Yes, they might be in a minority in the mobile market (Android holds a 73% OS share), but break down some of Apple’s current consumer offerings and you will see that there are a few key tools in their arsenal that could pave the way for a lucrative future in the realm of digital advertising.
For starters, with a considerable grip on their users’ experience, they have created both a hardware and software-based ecosystem the likes of which no other tech company can currently boast. Pair this with the greater exclusivity brought about by iOS 14 and the company’s one billion registered account-holders – each with a unique ID – using 1.65bn active devices, the possibilities are vast.
Then there are the various content distribution avenues. With pre loaded apps such as Apple Podcasts – the #1 podcast platform across most markets – and Apple News, not to mention a considerable amount of potential control over third-party apps, the company has an extensive ad network at its fingertips in any number of formats, from audio, to video to display.
And finally there are Apple’s privacy credentials, or at least the public perception of them, much of which was amplified by the iOS14 update itself. In doing this, they preemptively began cementing their position as bastions of user privacy, despite what we might be agreeing to in future updates.
What this would mean for advertisers
While this, of course, is all highly speculative at this stage, if it is the way Apple chooses to go, media buyers could have at their disposal a seamless, one-stop-shop for highly targeted, exclusive inventory from a single platform.
And even if this does not manifest itself as a mobile-first solution, there’s always AppleTV which could provide a much smoother route to the ad market, offering an aggregated privacy-centric measurement and optimisation method – all without the complexities that came with mobile display the first time round.
Intriguing possibilities indeed, but with so much power being held by one organisation, we run the risk of ending up back in the vicious cycle of reliance on a small handful of overly-powerful media partners and endangering media agnosticism in favour of the latest shiny proposition.
And we haven’t even mentioned brand safety, measurement and general transparency. Whilst various independent verification solutions are readily available now, we must remember that, in dealing with Apple, we will effectively be dealing with the owners of the hardware, the OS, the publishing platform and in some cases, the content.
Whatever tricks Apple does pull out of its hat, for agencies, it should be business as usual. Know the facts, plan accordingly, guide our clients...and pray the new solution isn’t called ‘iAd’!
Harry Evans is senior account manager at VCCP Media
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