It’s been a tumultuous few weeks for the digital advertising sector, primarily at the hands of the scions of Big Tech.
In late July, Google reversed earlier plans (four-plus years in the making) for online ad targeting and measurement in its web browser Chrome. Elsewhere, last week saw an audacious move from X to sue marketers for not spending enough money on the platform formerly known as Twitter.
It scared the guardians of some of the biggest brands in the world so much that their global trade org shelved its five-year endeavor to lead a collegiate effort to help clean up the often murky world of online advertising via the Global Alliance of Responsible Media (GARM).
Both these examples are evidence (if needed) that the ad industry has changed its approach to Big Tech, and waiting in the wings is Apple, a platform that’s not shy of blackening a few eyes if it sees fit for change.
Renowned for its long policy of total (public) silence until it is ready to make some noise, the iPhone manufacturer has made maneuvers in recent weeks suggesting pending (further) disruption for the online advertising industry.
The latest development causing advertisers and media owners — still reeling from the introduction of intelligent tracking prevention (ITP) in Apple’s Safari browser and other methods of couvert user-tracking — has been the further rollout of Distraction Control.
A prominent feature in the ongoing iOS 18 rollout, the feature lets Safari users “hide distracting items” for a brief period of time. And while not an overt ad blocker, most know that ads are deemed a distraction by many website visitors, so this will inevitably further frustrate publishers’ monetization efforts.
Speaking with Digiday in early June, when speculation that Apple would introduce a “web-eraser tool” at WWDC was reaching its height, Charles Manning, CEO of Kochava, opined how obscuring elements of the Apple ecosystem could bring hardship for more than just publishers.
“There’s not enough information to know if the verification vendors will have the ability to know whether or not an ad is shown,” he noted. “If the ‘eraser product’ is for ad-blocking, the million dollar question is whether or not Apple will make that instrumentation available. If they don’t, then the verification vendors are going to have pretty significant discrepancies between what they say is viewable and is actually viewable.”
Furthermore, Apple’s arrangements feature as a subplot in the recently concluded Google antitrust trial, where the search giant was ruled to be a monopolist. Appeals are pending, and the final outcome of that particular tussle between Google and the Justice Department is likely years away.
However, what’s likely is that Apple will likely have to forsake its $20 billion per year sweetheart deal to make Google the default search engine on its devices, a significant hit even if a halfway-house arrangement is reached, especially amid faltering sales of its flagship devices.
With Apple openly making “services” a key part of its corporate strategy, industry pundits will revive the prospect of the Cupertino-based company introducing its own search engine, especially as it made much of its partnership ChatGPT tie-up during its recent worldwide developer conference (WWDC).
“We presume that Apple has considered the negative ramifications of this DOJ ruling for quite some time, and as a result, we believe it has mapped alternative monetization paths in the event the Google exclusivity provision is eliminated,” wrote Morgan Stanley analyst Erik Woodring in a note to investors.
“These paths include (but are not limited to): introduce a choice screen in Safari and force global search vendors to competitively bid for favorable positioning (better positioning, better economics for Apple); renegotiate with Google and other search partners to collect better variable economics (i.e., allow search vendors to bid for placement in search access points, similar to retailers bidding for shelf space); and within Apple Intelligence, structure search contracts to collect TAC through new methods of voice-based search.”
Further afield, Apple is seemingly preparing a separate push in adland, one that will likely challenge the burgeoning advertising ambitions of fellow big-name platforms such as Amazon and Netflix.
The Telegraph reports that it met with U.K. TV industry measurement outfit Barb in recent weeks to discuss potential tracking options with such claims, echoing separate sources’ claims that some of its highest profile execs, such as Todd Teresi, were pushing a TV-like ad product last year in the U.S.
Separately, sources who had direct contact with Apple at this year’s Cannes Lions Festival of Creativity, the ad industry tentpole event, told Digiday that the tech giant was in an observational mode, and keeping its cards close to its chest.
Speaking with Digiday, eMarketer analyst Paul Verna noted how Apple’s ad business is on course to exceed $6 billion in revenue this year and further rise to $8.5 billion in 2026. While this significantly trails the burgeoning ad business of Amazon (another rising player in the industry) and the duopoly of Facebook and Google, Verna believes it could be poised to significantly increase its 2% share of the advertising business. “It’s always hard to know what Apple is up to as it is one of the most secretive companies,” he said. “But everybody is waiting for Apple to do something big,” he added.
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