Quiet but deadly?... It's easy to overlook Apple's ad biz, when Google and Facebook take the spotlight. Apple doesn't have a search engine or social network to fill with protein powder ads — but it does sell ads in its App Store, and displays ads in the News and Stocks apps. App Store ads are expected to bring in $2B this year (a fraction of Apple's $275B annual sales). For reference: Google made $46B in ad revenue last quarter alone. Buuut...
MiPhone, MiRule... These changes could hurt companies' precious ad-targeting, while giving Apple’s ad biz an edge. Apple has been getting heat for allegedly favoring itself on its platforms. Think: favoring its own apps on the App Store, and taking large cuts of purchases from non-Apple apps. Just last week, Apple and Google got grilled in a Senate hearing over their dominance of smartphone ecosystems. Still...
Ads could be Apple’s competition-slayer... Not because it has a massive ad biz, but because it can influence the fortunes of its competitors' main money-driver: ads make up ~80% of Google's sales, and 98% of Facebook's. Apple doesn’t have to become an ad giant to reduce ad giants’ power. The privacy changes are already poised to hurt its competitors. Meanwhile, Apple reportedly plans to expand its own ad offerings. JPMorgan estimates its ad revenue could grow to $11B/year by 2025.