Apple Finds Its Next Big Business: Showing Ads on Your iPhone

Apple Set to Expand Advertising, Bringing Ads to Maps, TV and Books Apps

Apple insider, Mark Gurman, on Apple's plans for advertising:

Inside the ads group, Teresi has talked up expanding the business significantly. It’s generating about $4 billion in revenue annually, and he wants to increase that to double digits. That means Apple needs to crank up its efforts.

I believe that the iPhone maker will eventually expand search ads to Maps. It also will likely add them to digital storefronts like Apple Books and Apple Podcasts. And TV+ could generate more advertising with multiple tiers (just as Netflix Inc., Walt Disney Co. and Warner Bros. Discovery Inc. are doing with their streaming services).

That being said, I don’t anticipate Apple going back into the business of serving up ads inside of third-party apps—at least not soon. Apple tried and failed at that with iAd starting in 2010.

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.

In the books and podcast apps, publishers could pay for their work to appear higher in results—or in ads placed throughout the apps. Publishers have long been able to sell books inside of the Apple Books app, and subscribing to podcasts could be tied to advertising as well.

An ad-supported TV+, meanwhile, could offer older shows for a lower price—and help promote the paid offering.

Now the only question is whether the customers of Apple—a champion of privacy and clean interfaces—are ready to live with a lot more ads.

We have already seen the groundwork start to unfold with yesterday's news about Apple getting into the 'Google My Business' game.

To me, this is both frustrating and makes complete sense.

Apple stood by watching Google and Meta make BILLIONS on iPhone devices. Renting land on the internet is always a threat. So it was only a matter of time.

But the frustrating part is the lack of parity. Apple's ATT initiative has kneecapped not just advertising behemoths but also the small companies that built their businesses on those behemoths. That is fine if Apple has a replacement. But as of today - and if this article is true, anytime in the near future - Apple isn't offering ad placements that serve the same function. Small and medium retailers who build brands through cost-efficient online advertising don't have apps. eCommerce brands often don't have brick-and-mortar presences either. They aren't authors or musicians, and their audience isn't in the stocks app.

And even if they have one of those things, the scale still isn't the same - nowhere close.

So until Apple's ad business evolves to fill the hole it created in the market, those small businesses will continue to suffer. And that is a shame.