Apple is making a major move into advertising just 18 months after releasing a bunch of iPhone privacy features that cripple Facebook’s ability to track users. This month, an article in Digiday revealed how Apple is building a team to manage a demand side platform (DSP).
The job ad described how the iPhone maker wants to “drive the design of the most privacy-forward, sophisticated demand side platform possible,” Digiday wrote.
This is an important move for Apple because a DSP is a “core part of an ad stack for any company with designs on winning more media dollars,” according to Digiday. For people who aren’t familiar, a DSP is a platform that allows advertisers to use automation to boost media campaigns, often leading them to spend more money.
At the same time, it’s been confirmed that Apple is offering more advertising placements in its App Store, in the Today tab and individual app pages. Meanwhile, Apple services chief Todd Teresi has been instructed to focus on advertising opportunities.
The iPhone maker’s new advertising moves indicate a shift in how Apple makes its revenue. Hardware alone won’t cut it—and advertising can be lucrative when times are hard. Just look at what’s happening with streaming platform Netflix, which is considering an ads-based model amid falling subscriber numbers.
A major blow to Facebook
Apple’s move into advertising is a major blow to Facebook. The iPhone maker has spent the last couple of years making it harder for companies such as Facebook—which rely on tracking across other apps and websites—to operate. While Apple has been pushing privacy as a USP, it has allegedly been building its own ads business in the background.
Apple has tried to move into advertising before with iAd, which failed in 2016 after a lack of demand. But times are very different now, with consumer appetite for change leading advertisers to seek privacy-first ways to sell products. This is where Apple has a strong play and reputation.
Apple’s Facebook-breaker feature, App Tracking Transparency (ATT), asks people to opt-in to tracking via the identifier for advertisers (IDFA). Many iPhone users have opted out of this type of tracking, and it’s estimated Facebook could lose over $12 billion as a result.
It comes as browser makers seek ways to move away from third-party cookies. Google has been suggesting alternatives such as the disastrous FLoC and now Topics, but the tech giant recently announced a delay in the move away from cookies to help advertisers transition.
Data as a currency
Over the last few years, data has increasingly become a currency for tech firms such as Google and Facebook, but their privacy-infringing ways have led many users and advocacy groups to protest.
Regulation such as the EU GDPR is also influencing things—it’s no longer easy to collect and share personal information without explicit consent.
“Apple has tried to be transparent about the tracking of apps, offering help to reduce the amount of data sent to Facebook or Google,” says Jake Moore, global cybersecurity advisor at ESET. However, he warns that data “is clearly the currency of the 21st century.”
Taking this into account, Moore advises limiting access to data via permissions and by using burner emails.
But it’s also good to be aware that advertising isn’t about to go away. Especially at a time when costs of living are rising, there’s no doubt about it—advertising makes the world go round.
What’s important is that it is done optimally, respecting people’s data and their privacy and taking into account any pitfalls of, for example, users being put into groups based on interests.
Apple will certainly need to consider this as it grows its ads business. But trust is a big factor and judging by the last couple of years, Apple will probably do a good pretty good job at cementing its place in the market.