Apple CEO Tim Cook holds the new iPhone 14 at an Apple event at their headquarters in Cupertino, California, September 7, 2022.
Carlos Barrio | Reuters
Apple plans to release new ad “placements” as early as the holiday season, according to a message sent to developers on Tuesday inviting them to an online session to encourage them to buy ads.
The new spots represent a significant expansion of Apple’s advertising inventory, which is focused on the App Store. In recent years, Apple’s ad inventory has been limited to one unit on the App Store’s Search tab and one on the search results page.
“With new opportunities coming to Apple’s search ads, you can promote your apps in the App Store to engage even more customers this holiday season,” according to the message, which was posted by Mobile Dev Memo founder Eric Seufert and confirmed to CNBC by a developer who received the invitation.
The message to developers did not specify where the new ad placements will be offered, but in July Apple announced that it was planning to expand its menu with an ad unit on the Today tab, which is the front page of the App Store, and another . sponsored item on the app’s product pages under the “You May Also Like” banner.
“Apple Search Ads provides opportunities for developers of all sizes to grow their business. Like our other ad offerings, these new ad placements are built on the same foundation—they will only feature content from product pages of App Store approved apps and will adhere to the same rigorous privacy standards,” an Apple representative told CNBC.
The inventory expansion comes as Apple’s advertising business comes under increased scrutiny.
Apple’s advertising revenue is reported as part of its services business, which also includes warranties, search engine licensing, App Store sales and online subscription revenue, among others. Apple reported more than $68 billion in services revenue in 2021.
Bank of America analyst Wamsi Mohan estimated in July that Apple could generate $5 billion in ad revenue from Apple Search Ads alone in 2022.
In 2021, Apple released App Tracking Transparency (ATT) to give iPhone users the option to either share a unique ID with app developers or refuse to share it. Most iPhone owners choose not to share, preventing online advertisers from accurately tracking the performance of their ads.
Apple says it made the change because of its corporate position on user privacy. It allows its users to opt out of personalized ads from Apple in the App Store and prevent Apple from using data such as account information and previous purchases to target search ads. 78% of users opt out of Apple’s personal ads, a rate similar to some ratings of users opting out of ATT.
Advertising companies, including Facebook, Meta, have called ATT anti-competitive and self-serving. Meta said Apple’s turnaround could cost it $10 billion this year.
