June 13, 2018 | by Alexian Chiavegato

New Apple Ad Network for Apps

So, apparently Apple is interested in dipping its toe into the mobile ad business again. Well, let’s be honest, metaphorically, Apple has pretty big feet so whatever it dips into the water will likely cause a big ripple.

But the recent report by The Wall Street Journal is interesting, especially since Apple CEO Tim Cook recently was critical of other big tech companies building their business primarily around advertising and alleging they nefariously collect way too much information on their customers.

A look back at the iAd Network
But remember, once upon a time, way back in 2010, Apple launched the iAd network with an attention-getting headline quote “Most Mobile Advertising Really Sucks.” Of course, at the time and still today, we at Marfeel vehemently disagree with that assessment but at least Apple’s heart was in the right place. The late Steve Jobs felt app developers were giving away their product and that there was a huge opportunity to help them make some money—so they would keep developing “free” apps for Apple to monetize. As you would expect, they hosted and delivered ads with a promise to give developers 60-percent of the sales.

It didn’t work. At least by Apple’s amazingly large standards at the time. iAd earned “just” $125 million in revenue in 2012 (growing from $95 million) but the entire ad serving industry grew to $1.7 billion in the same time frame from $650 million. That is a piece of the pie that Apple couldn’t swallow even knowing the fixes were obvious. It charged higher prices than competitors and restricted the types of ads marketers ran. So iAd was eventually jettisoned in 2016. Do you think they would’ve done better IF they collected more customer information?

Data collection
As it is, the WSJ article said Apple is now set to collect “information such as name, address, age, gender, device use, app activity and music, video or book downloads. It uses that data to create groups of people for targeted ads, such as 18- to 34-year-old men using an iPhone. It doesn’t collect personal data from tools like Maps and Siri to use for advertising.”

As the old saying goes, “you have to start somewhere” even if self-imposed constraints on data collection and use are perceptible handcuffs in the advertising market vs. mighty Google and Facebook. However, the revamped App Store ad business appears to be gaining some revenue steam for Apple. The company said it generated almost $1 billion in revenue last year. And it follows that partnering with such popular apps such as Snap and Pinterest, among others, would be a good start to a business that is seen by some as a way to offset slowing iPhone growth.