Apple Set to Expand Advertising Business

Bloomberg insider Mark Gurman in his latest weekly Power On newsletter has reported that Apple prepares to expand its own advertising business significantly over time and cuts back on acquisitions.

Apple currently shows ads in the News and Stocks apps, as well as in the App Store on iPhones, iPads and Macs. In addition, Apple most recently placed ads on TV+ for its "Friday Night Baseball."

Apple sends a part of the advertising revenue from the News app's Today tab to publishers, but it's unclear exactly how much. Apple also allows publishers to place ads in their stories and keep most of that money for themselves. Ads in Today still appear even with a paid subscription to News+. This is, according to Gurman, a rarity for paid services on iOS.

Gurman reports that the company's advertising system uses data from other services and Apple's account to target ads. Despite the ability to turn off ad personalisation feature, the system will still use data such as your carrier, device type and what the user is reading.

Currently, Apple prepares to expand its advertising business. A few months ago, advertising teams became part of the company's services organisation. Inside The ad group's vice president in charge, Todd Teresi spoke of a significant expansion of the business into the double digits. It now has annual revenues of around $4 billion.

Gurman believes that Apple will eventually extend search advertising to Maps, to digital stores, such as Apple Books and Apple Podcasts, and increase it to TV+. However, Gurman believes that Apple will not return to the business of placing ads in third-party apps after the company failed with iAd.

Gurman also said that Apple drastically cuts back on acquisitions. Apple spent just $33 million on M&A in fiscal 2021, although the iPhone maker has bought all sorts of companies over the past decade or so that have led to major new advances, such as Siri, the updated iOS 16 weather app, Apple Music and Apple News.