Apple has plans to sell ads in new spots in the App Store by year-end, potentially becoming the latest player to contribute to an accelerating mobile advertising market, according to sources familiar with the company’s thinking. Apple’s iAd unit, which sells ad space on iPhones and iPads through its App Store, will run pre-roll video ads inside apps as well as banner ads within search results, the people said. Apple was testing the ads last month but has not yet decided on specific launch timing or how it will price them, one of the people said.
According to a letter sent to developers on Tuesday inviting them to an online session to persuade them to buy advertisements, Apple intends to introduce new ad “placements” as soon as the Christmas season.
The new advertisements mark a considerable increase of Apple’s App Store-focused advertising inventory. Apple’s advertising inventory has recently been restricted to one unit on the search results page and one unit on the App Store’s Search tab.
The letter, sent by Mobile Dev Memo creator Eric Seufert and confirmed to CNBC by a developer who received the invitation, said: “With new chances coming to Apple Search Ads, you can advertise your apps throughout the App Store to engage even more people this Christmas season.”
The additional ad placements were not specified in the letter to developers, but in July, Apple disclosed intentions to broaden its menu with an ad on the Today tab, which acts as the App Store’s main page, and another sponsored unit on app product pages with the tagline “You Might Also Like.”
Developers of all sizes may grow their businesses with Apple Search Ads. these new ad placements were created with the same guiding principles as our current advertising products and will adhere to the same high privacy standards by only using content from authorised App Store product pages.
The rise in inventory coincides with growing scrutiny of Apple’s advertising business.
Apple’s advertising revenue is mentioned as a part of its services division along with warranties, search engine licencing, App Store sales, and online subscription revenues. In 2021, Apple’s services generated about $68 billion in revenue.
An analyst at Bank of America named Wamsi Mohan forecasted in July that Apple may only generate $5 billion in advertising revenue from Apple Search Ads in 2022.
App Tracking Transparency (ATT), a feature introduced by Apple in 2021, gives iPhone users the option of sharing or not sharing a personal ID with app developers. Since most iPhone users choose not to share, it is challenging for online advertisers to determine with precision how successful their advertisements are.
Apple contends that its corporate position on consumer privacy caused it to alter. It gives its own users the ability to disable Apple’s customised ads on the App Store and prevent Apple from using data like account information and past purchases to target search advertisements. Similar to certain estimates of the number of users that disable ATT, 78% of users turn off Apple’s personal ads.
Advertising companies have criticised ATT for being anticompetitive and self-serving, including Facebook’s parent corporation Meta. According to Meta, Apple’s decision might cost them $10 billion this year.