Apple has taken a significant step in its advertising strategy, moving away from third-party vendors and beginning to sell ad space on its Apple News platform directly. The company is now pitching marketers on a variety of ad units, including banner placements, video ads, and sponsorship opportunities for curated editorial content.
Key Details
- Direct Ad Sales: For the first time, Apple is managing its own ad inventory for Apple News, one of the most popular news apps in North America, the U.K., Canada, and Australia.
- New Sponsorships: Starting next year, Apple will offer premium sponsorships for major events like the Met Gala. Advertisers will also have the option to sponsor specific News feeds.
- Revenue Share for Publishers: Publishers will receive 70% of the ad revenue generated from ads placed within their articles, as reported by Axios.
- Growth Opportunity: The initiative aims to expand Apple’s advertising revenue, especially as the company anticipates a modest performance for the year-end period.
Advertising Expansion
Apple’s move to sell its own ad inventory highlights its growing focus on advertising as a key revenue stream. Apple’s ad revenue is projected to reach $11 billion globally in 2024, up from $8.9 billion the previous year, according to eMarketer.
With its News platform, Apple offers brands access to a highly engaged audience. iPhone users, for instance, spend nine more hours per month engaging with apps compared to Android users, despite Android dominating the global mobile market in sheer numbers.
Strategic Moves
Apple has already been selling ad inventory in search and the App Store, and the company has been making additional strides to expand its advertising business:
- Leadership Appointments: Lauren Fry, a former executive in streaming ad sales, was appointed last year to oversee ad sales for Apple News and Apple TV+.
- Focus on Hardware Recovery: As hardware sales slow, Apple is leaning on its advertising and AI innovations to boost revenue. Notably, iPhone revenue grew by 6% in Apple’s fiscal Q4 2024, partly due to the launch of the iPhone 16, which includes advanced AI features through the company’s Apple Intelligence initiative.
- Enhanced User Retention: Apple is also prioritizing user retention through initiatives like Rich Communication Services (RCS) for better cross-platform messaging and personalized AI-driven experiences.
Insights
Apple’s direct approach to selling News ads gives advertisers another avenue to engage with its valuable user base. It also underscores the company’s effort to diversify revenue streams beyond hardware and invest in areas that align with its long-term strategy. With premium placements and sponsorships now available on its News app, Apple is positioning itself as a significant player in the digital advertising space while continuing to enhance its ecosystem for both users and brands.
Source: Marketing Dive
