Apple plans to triple advertising

The company may soon bring more ads to iPhones and iPads, as well as specific apps.

Apple is poised to embark on a new strategy that will see it show ads on pre-installed apps on iPhones and other Apple devices, in an effort to grow its advertising business.

Bloomberg's Mark Gurman claims that the iPhone maker aims to triple its advertising income, currently about $4 billion annually, pushing it into the 'double digits.'

Gurman says the company has already tested the inclusion of sponsored results alongside search results in the Maps app, similar to the App Store Search Ads programme.

He speculates that Apple may also have plans to display ads in other apps, including Podcasts, Books and Apple TV. The latter would be through a subscription model that would feature an ad-supported tier in exchange for a lower monthly charge, similar to new moves from streaming competitors.

It is a significant shift from Apple's prior approach, which focused on hardware to generate revenue.

Apple's hardware sales have slowed over the last five years, prompting the company to concentrate on the revenue-generating potential of its services divisions, which includes advertising.

Apple announced iAd in 2010, allowing app developers to use Apple banner adverts rather than those from Google AdMob and others. This was the company's first entry into the advertising sector, although iAd was mostly unsuccessful; the company shuttered it a few years later.

Last year, Apple faced criticism for attempting to grow its own advertising business whilst hobbling the third-party ad market by introducing privacy features such as App Tracking Transparency (ATT).

Using ATT, Apple customers can choose whether apps can track them across different websites and other applications. This feature is crucial for advertisers who want to collect data and subsequently serve up more targeted advertising.

ATT has proved to be a major blow for both large and small businesses. Meta and Snap, for example, both claim to have lost billions of dollars as a consequence of Apple's privacy changes.

Considering the higher privacy ATT affords users, Gurman describes the company's plan to expand its ad business as "ironic."

Apple already displays ads in certain apps, including Apple News and Stocks, and recently disclosed its intent to increase ads in the App Store.

Gurman mentions the possibility of advertising on Apple TV Plus and asserts that Apple could announce a less expensive ad-supported tier, similar to plans from Netflix and Disney Plus.

Needham analysts said in a report dated 3rd August that they think advertising will be Apple's next significant source of income.

"AAPL has best-in-class user data," they said.

"If it builds a DSP (demand side platform), AAPL can control how and where its data gets used, and can prevent data leakage outside their Walled Garden."

The experts said they think Apple is only starting to develop a new mobile advertising platform.

There has been a "notable rise" in the company's recruitment efforts for its Ad Platform, they claimed, adding that it was clearly visible at the Cannes Lions advertising festival in June.