Apple’s Privacy Policy Drives Ad Dollars Away

ITunes Radio

Apple is “the best-looking girl at the party, forced to wear a bag over her head”, according to an ad marketer describing the iPhone maker’s position on the ad market. Since the company ventured into the ad business, a lot has happened, but it has somehow failed to cash in, as the biggest advertising money goes to Google and Facebook. Why did Apple fail to grab the biggest sack of advertising money? Ad Age has several ideas.

You may ask why Apple is interested in the ad business when it makes so much money outside it? Well, according to Ad Age, one explanation for this could be that Apple is attempting to foster a revenue stream for its App Store ecosystem.

But the “problem” with the ad business is that marketers have a hunger for user data, which doesn’t quite comply with the company’s privacy policy. Apple has strict rules when it comes to sharing user data.

Apple might come out ahead of its competitors on data, if it would share. “It’s one of the best in terms of data quality and accuracy … but I think Google is a little more open,” said Dan Grigorovici, co-founder of mobile-ad firm AdMobius, who was a software manager at Apple until 2012 and a principal developer of iAd’s measurement and analytics capabilities.

Advertisers want to use Amazon and Apple’s information — whatever little of it they can get — so they’ve been willing to play ball, even if it means doing so with an abridged playbook.

So, although it is among the most-admired companies because of its refusal to share this kind of data, the company ended 2013 collecting only $258 million in US mobile ad revenue compared to Google’s $3.98 billion and Facebook’s $1.53 billion.

Some say Apple doesn’t even have an official sales target for its ad business. But iTunes Radio suggests a change in strategy. Launched last fall with a big boom, iTunes Radio had several ad partners, including Nissan.

Although we can consider the first couple of months a trial run, there have been rumours that a slight change in Apple’s initial deal targets ($1 million was said to be the previous one), as the company tries to monetize its music streaming service. The change in strategy is corroborated by branded channel launches such as Pepsi’s Radio (iTunes Radio) and the recently added Red Bull channel to Apple TV.