Apple, the Ad Critic, Now Embraces Ads

For years, Apple has been a loud critic of online advertising that relies on hogging as much information about us as possible. Now, the company wants to become a bigger seller of online ads, and says it can do so in a less creepy way.

The question is: Can Apple successfully sell online ads without the ick?

This will be a test — with us as real-world subjects — of whether there can be a future of digital advertising that gobbles less of our information, or whether the status quo is too powerful to change.

Apple’s goal is possible, digital advertising experts told me, but it won’t be easy.

Many companies, including Google, Facebook and obscure data middlemen, track our phones wherever we roam, record all the websites and apps we use and match up bits of seemingly small details like how much battery life is left on our phones.

They do this mostly to fine-tune pitches for butt flap pajamas and other stuff, or to sell our data in bulk in ways we can’t imagine.

The digital advertising system is ugly but lucrative, partly because it works. Apple relies far less on these common online methods of tracking, but it might need to bend to this reality if it wants to become a bigger ad player. Plus, Apple’s campaign to crack down on existing ad methods and sell its own ads opens the company to criticism that it’s acting hypocritical.

Let me explain why Apple wants to go bigger in ads, how the company approaches advertising and how our digital experiences might change.

Why does Apple want to sell more ads?

Because money.

It’s incredibly profitable for Apple to sell ads when people search the iPhone App Store for fitness apps or read articles in the Apple News app.

Apple won’t mention it on Wednesday when it introduces new iPhone models, but the company wants more ways to earn income to keep growing as sales of smartphones stagnate. Bloomberg News and The Financial Times have recently reported that Apple plans to expand its advertising business, including by potentially showing commercials in Apple Maps and other sites and apps.

Other companies that haven’t made money from ads, such as Amazon, DoorDash and Instacart, are increasingly trying these advertising side hustles, too.

How Apple’s ads are different.

Everything we click, everywhere we go with our phones and many of our personal details have become commodities to tailor advertisements to us.

This might lead to lower prices because businesses know that I am more likely to respond to an ad for a cycling vacation than my neighbor, who is not so enamored with biking.

But more consumers, lawmakers, regulators and companies want to put limits on this data arms race. Many of us feel unnerved by digital snooping but don’t really have a choice.

Apple offers an alternative — to a point.

One hypothetical example: The maker of a video game app can tell Apple that it wants to show ads in the app storefront to women using iPads in San Francisco who had previously downloaded an app from the same company.

Unlike many other companies, Apple won’t let that app maker single out people who recently visited the website of a competing video game or people whose email addresses are on file with the app developer.

Plus, Apple doesn’t permit ads that will reach fewer than 5,000 people, and it tailors ads to groups of people rather than individuals.

Apple also says that a vast majority of ads on its devices are shown to people who choose the option of not seeing any personalized ads. Those people still see ads, but the ads aren’t tailored to them.

The limits of Apple’s approach.

Several digital ad experts told me that if Apple wants to be a bigger player among data-hungry ad sellers, it will have to compete in a reality in which it’s normal to harvest any morsel of our data if it might help sell socks.

To appeal to advertisers, Apple might be pressured to be more intrusive and do things like recommend apps based on what other apps you use or what you do in those apps.

Apple says that it won’t do this, and that its ads that aren’t personalized to people’s interests are no less effective.

Even so, the more ads that Apple sells, the more it encounters potential conflicts.

Last year, when Apple started giving iPhone owners the option to block apps sharing people’s information with other companies, ad sellers including Facebook and Snap had to rebuild their advertising systems. Some smaller businesses that advertise to customers online said that Apple’s changes hurt them. But that and other changes in digital advertising are empowering ad sellers like Apple, Google and Amazon that already have reams of data about us.

That said, experts I spoke to said that Apple was mostly genuine about its commitment to steering digital life away from relying on collecting as much information as possible. One big question is whether Apple can stick to its principles to protect people and still make all the money it wants.

Before we go …

  • The drugstore will now make house calls: CVS Health agreed to buy Signify Health for $8 billion, my colleague Lauren Hirsch reported. Signify makes technology and data tools that help thousands of doctors offer in-home health care.

  • Kiwi Farms, an online message board where people organized harassment campaigns, was essentially taken offline. NBC News and the newsletter Garbage Day explained the harm that rippled from people on the site. The Washington Post also reported why Cloudflare, a crucial cog in maintaining websites, decided in recent days that Kiwi Farms posed “imminent danger,” as the company’s chief executive said. (A subscription may be required.)

  • Are you watching the most expensive season of TV ever made? Amazon said that more than 25 million people watched its “Lord of the Rings: The Rings of Power” series on the first day it was available. That’s a lot, although statistics on streaming video viewership are notoriously squishy, The Hollywood Reporter said. Amazon will likely spend more than $1 billion — not a typo! — over the life of the series, The Wall Street Journal reported. (A subscription may be required.)

    Related from On Tech in 2021: Why is Amazon in entertainment?

Hugs to this

This dog created an escape hatch to the roof. (Thanks to my colleague Erin McCann for sharing this tweet.)

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