The last few weeks have been turbulent for the digital advertising industry, especially due to the offspring of the major technology companies.
In late July, Google reversed earlier plans (over four years in the making) for targeted online advertising and measurement in its Chrome web browser. And last week saw a bold move by X to sue marketers for not spending enough money on the platform formerly known as Twitter.
Guardians of some of the world’s biggest brands were so alarmed that their global trade body shelved its five-year plan to lead a collegial initiative, through the Global Alliance of Responsible Media (GARM), to clean up the often opaque world of online advertising.
Both examples are a sign (if there is any evidence) that the advertising industry has changed its attitude towards big tech companies. And Apple is already in the starting blocks – a platform that is not afraid of black eyes when it sees fit to make a change.
The iPhone maker has long been known to maintain a policy of total (public) silence until it’s ready to make some noise, and in recent weeks it has been making maneuvers that suggest (further) disruption to the online advertising industry is imminent.
The latest development that has advertisers and media owners – still reeling from the introduction of Intelligent Tracking Prevention (ITP) in Apple’s Safari browser and other covert user tracking methods – upset is the further rollout of Distraction Control.
The feature, which is being introduced in the ongoing iOS 18 rollout, will allow Safari users to “hide distracting elements” for a short period of time. And while it’s not an obvious ad blocker, most people know that ads are annoying to many website visitors, so this will inevitably further hinder publishers’ monetization efforts.
Speaking to Digiday in early June, as speculation peaked that Apple would unveil a “web eraser tool” at WWDC, Kochava CEO Charles Manning expressed the opinion that obfuscating elements of Apple’s ecosystem could cause trouble for more than just publishers.
“There is not enough information to know whether the verification providers will be able to detect whether an ad is being shown or not,” he noted. “If the ‘Eraser product’ is intended to block ads, the million-dollar question is whether Apple will provide those tools. If not, the verification providers will see pretty large discrepancies between what they say is visible and what is actually visible.”
In addition, Apple’s agreements play a supporting role in the recently concluded antitrust case against Google, which found the search engine giant to be a monopolist. Appeals are still pending, and the final outcome of this particular dispute between Google and the Justice Department will likely be years away.
However, it is likely that Apple will have to abandon its $20 billion-a-year deal to make Google the default search engine on its devices. Even if a compromise is reached, it would be a major blow, especially given the faltering sales of its flagship devices.
With Apple openly making “services” a central part of its corporate strategy, industry experts are set to revive the prospect of the Cupertino-based company launching its own search engine, especially after it made much of its partnership with ChatGPT during its recent Worldwide Developers Conference (WWDC).
“We believe Apple has been considering the negative impact of this Justice Department decision for some time and, in our opinion, has developed alternative monetization paths in the event of a lifting of Google’s exclusivity clause,” Morgan Stanley analyst Erik Woodring wrote in a note to investors.
“These opportunities include (but are not limited to): introducing a choice screen in Safari and forcing global search providers to bid competitively for favorable positioning (better positioning, better economics for Apple); renegotiating with Google and other search partners to achieve better variable economics (i.e. allowing search providers to bid for placement in search access points, similar to how retailers bid for shelf space); and structuring search contracts within Apple Intelligence to collect TAC through new methods of voice-based search.”
In addition, Apple is apparently preparing a separate foray into the advertising world that will likely challenge its burgeoning advertising ambitions from other major platforms such as Amazon and Netflix.
The Telegraph reports that it has met with UK TV measurement company Barb in recent weeks to discuss potential tracking options for such claims, confirming claims by other sources that some of the company’s most prominent executives, such as Todd Teresi, have been pushing a TV-like advertising product in the US over the past year..S.
Regardless, sources who had direct contact with Apple at this year’s Cannes Lions Festival of Creativity have The told Digiday that the tech giant is in an observational position and is not holding its cards in its hand.
Speaking to Digiday, eMarketer analyst Paul Verna noted that Apple’s advertising business is expected to generate over $6 billion in revenue this year and grow further to $8.5 billion by 2026. Although this falls well short of the burgeoning advertising business of Amazon (another emerging player in the industry) and the duopoly of Facebook and Google, Verna believes the company could significantly increase its 2% share of the advertising business. “It’s always hard to know what Apple is up to because it’s one of the most secretive companies,” he said. “But everyone is waiting for Apple to do something big,” he added.
