Apple Is Quietly Ramping Up Its Ad Game With Search Ads Expansion

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Key insights:

In 2010, Apple introduced its mobile ad platform, iAd, as part of then CEO Steve Jobs’ vision to beautify mobile display ads, but that shuttered in 2016. It was considered a rare blemish in recent history.

Since then, the company has been building an in-app ad platform geared toward performance ads instead of the big branding displays of the past.

Apple has been laying a trail of breadcrumbs hidden in terms of service updates that could lead to its developing a closed-loop ad platform aimed at helping developers monetize their apps and acquire new users.

In March 2018, Apple introduced its SKAdNetwork, a privacy-first measurement API that many in the industry believe portends the end of Apple’s mobile ad ID: the IDFA. Over the past two months, Apple made changes to its app developer guidelines and Search Ads Campaign Management API to allow developers to share marketing messages via push notification and advertise through new owned-and-operated channels other than the App Store.

Recent updates to language in Apple’s Search Ads Terms of Service change the definition of “Apple.” Instead of referring to it as “the location of the App Store serving Your Ad Content with Search Ads,” the terms now refer to it as “the location where Your Ad Content is served using the Services.” That change may seem insignificant, but by broadening the scope of “Apple” in the terms of service, the company no longer limits its App Store to being the sole supply channel for search inventory.

Apple has not responded to Adweek’s request for comment on its latest updates.

Granular targeting

Charles Manning, CEO of Kochava, confirmed that in recent weeks partners for Apple Search Ads have been able to update their integrations with the App Store owner that theoretically enable it to support new ad formats as well as new supply sources.

“Between an ad channel type and a supply source, there’s a whole myriad of optionality,” said Manning, adding the newly updated integration has the potential to support ad formats on its suite of apps, such as Apple News, though it’s unclear if that will extend to its Safari browser.

According to Manning, Apple’s partnership program means advertisers are now able to attribute an app download to a specific keyword they have bid upon. “It’s a really interesting feedback loop for brand marketers in the same way that they discovered search ads in general across Google 10 to 15 years ago,” he added.

Apple, the world’s first trillion-dollar company, makes most of its money on device sales. The company has taken a staunch privacy-first stance over the years, and it’s essentially broken advertising within Safari. But Apple doesn’t have to cater to Madison Avenue; it needs to win over app developers.

One of the major selling points of the iPhone, and Apple’s other mobile devices, is that users are able to personalize their app experience. Because of this, Apple can’t jeopardize developers’ ability to monetize their apps the way it undermined advertising in Safari, otherwise, developers would flee to Android devices, where Google has a robust ad offering.

By opening up more supply and using the SKAdNetwork to provide targeting and measurement data, Apple can essentially create a closed environment for developers to reach users without sharing a specific ID that would tie back to the owner of a given device.

Where iAd went wrong

Apple brought iAd to market in July of 2010, before U.S. mobile ad spend had eclipsed $1 billion. By the time it shuttered in 2016, mobile ad spend surpassed $10 billion. This year, it’s expected to surpass $120 billion, making it by far the largest digital ad channel, according to eMarketer.

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