Apple Inc. is one of Silicon Valley’s most beloved companies, at least by those who use its products. The company has a reputation for delivering high quality experiences that do not bow to rude advertising in every corner of the screen. It turns out, however, that Cupertino has a secret he wants everyone to hear: it’s actually ridiculously good at manipulating users through advertisements.
This is the message to the head of Apple Advertising Platforms Todd Teresi seems to want to deliver. He says the company’s new Search Ads platform has a 50 percent conversion rate. That’s a pretty incredible number for any advertising company. For Cupertino, however, it is magic. Tim Cook’s obsession with privacy has been blasted as a factor holding back the business.
Teresi’s conversation at The release conference was originally reported by Apple Insider.
Apple Inc. boasts of improvements in ad technology
A 50 percent conversion rate on Search Network ads means that half of the people who interact with an app ad on the App Store download the software.
What’s even more incredible is that Search Ads is a new system, designed to replace iAds, that the company launched last September. According to Teresi, relevance is important to the business. Apple does not believe in a free and unlimited advertising market. Instead, it restricts ad buyers based on their gender and other factors. This prevents irrelevant apps from sitting on good keywords.
Apple will also start sharing information about downloads with developers. This will help those who are trying to sell apps decide what is the best type of advertising for them.
These data were a point of contention in the past, and it has been difficult for advertisers to determine the success of their hard work.
For the moment, the Search Ads system only works on the App Stores of four English-speaking countries: the United States, Australia, the United Kingdom and New Zealand. Apple Inc. is however excited to deploy the system worldwide. With its incredible conversion rate, why shouldn’t it be?
Is advertising manipulation?
There is of course an argument that Apple’s greatness lies in targeting rather than manipulation. If you manage to advertise breakfast places when people are looking for them, is it really manipulation? Tim Cook, on the whole, seems to think so.
He had a lot of problems in the past user data being used extensively to inform advertising choices. Using a broad definition of “manipulation”, there are aspects of manipulation in any advertisement. That doesn’t make it all so manipulative, however.
Apple has a clear code of conduct on how it shares user data with advertisers and third parties. The company does not operate in the same dragnet style as Alphabet Inc and Facebook Inc.
The key point here, however, is the competition. Alphabet Inc has been very successful in attracting smaller developers to Android because of its easier to play advertising game. Tim Cook responded with research announcements to complaints from small developers.
For those who hope the company never starts using user data like the rest of its peers, this story should be instructive.
Apple was built on marketing
Although the company has never sought to collect endless data, Apple has built on advertising. He’s always been great at it too, and it’s one of the few companies that has an almost magnificent continuity that comes from marketing, design, and finally functionality. Features are design, and design is marketing.
With Apple Inc. being such an accomplished ad creator, it’s a wonder it has taken the company so long to catch up with ad technology. The answer seems to be a longer term view of the marketing strategy.
Tim Cook has been unusually outspoken on the privacy issue. This is partly forethought, he seems to believe that there will be a impact of data collection at one point. Another part is building a key intangible feature of iOS. You may not be able to see it directly, but your data is safer in Cupertino than in Mountain View.
The lack of ads has hurt Apple, at least in some way, though. The company has lost opportunities in AI, mapping, advertising and more as it is behind Alphabet Inc in data analytics.
Can Apple’s Stock Live Outside the iPhone?
Every time Apple makes some kind of improvement to some part of its technology, investors ask the same question, “Can this help increase iPhone sales?” The question they asked was: “Can it help diversify income?“.
With the decline in iPad sales and the seemingly slow growth of the Apple Watch, the second question has receded. At present, the iPhone is the only thing that matters, and investors are focusing on it.
Despite this, any improvement in service is probably good for Apple. Some on Wall Street fear the company’s push for media services will be completely baffled at this point. Andy Hargreaves of Pacific Crest sees a lots of warning signs.
In his mind, the growth of the service and App Store segments is on the decline. He counts that Apple Music is actually unprofitable, and that the growth of the App Store is decreasing both in number of users and in spend per user. This thesis contradicts the optimism that surrounded Tim Cook’s services grow.
Ad tech won’t save Apple, but it helps
That’s not to say that developments like Apple Inc.’s ad technology push don’t matter. In a mature market like smartphones, defense can be just as important as attack. Discovering applications is an important part of the experience on a mobile operating system. For this reason, the company must keep pace with Google’s Android.
Tim Cook will release Apple earnings figures for the three months through June on August 1. While analysts expect a ho-hum quarter, the focus will be on the future. Firm’s third-quarter profit forecast expected to contain information about the delayed iPhone 8 release date, the current concern of Wall Street analysts.
Apples Search advertisements isn’t likely to feature in the iPhone 8 launch. That doesn’t stop it from making development valuable, however. The level of engagement described is truly amazing, and anyone who has used BlackBerry World or the Amazon App Store will know how valuable good app discovery is.