Apple plans to nearly double the workforce in its fast-growing digital advertising business less than 18 months after it introduced sweeping privacy changes that hobbled its bigger rivals in the lucrative industry.
The iPhone maker has about 250 people on its ad platforms team, according to LinkedIn. According to Apple’s careers website, it is looking to fill another 216 such roles, almost quadruple the 56 it was hiring in late 2020. Apple disputed the figures but declined to elaborate.
The digital ads industry has been on edge about Apple’s advertising ambitions since it launched privacy rules last year that disrupted the $400bn digital ads market, making it difficult to tailor ads to Apple’s 1bn-plus iPhone users.
Since the policy was introduced, Facebook parent Meta, Snap and Twitter have lost billions of dollars in revenue — and far more in market valuation, although there have been additional contributing factors.
“It was really almost like a global panic,” said Jade Arenstein, global service lead at Incubeta, a South Africa-based marketing performance company, of the impact of Apple’s changes.
Meanwhile, Apple’s once-fledgling ads business is now “incredibly fast-growing”, according to a job ad. The business has gone from just a few hundred million dollars of revenue in the late 2010s to about $5bn this year, according to research group Evercore ISI, which expects Apple to have a $30bn ads business within four years.
Compared with Google and Facebook, whose 2021 advertising revenues were $209bn and $115bn, respectively, Apple’s ads business is tiny. But the digital ad industry’s fear is that it could expand quickly, in part by setting rules that critics and rivals say give it an unfair advantage.
“Building new ad systems to effectively compete with incumbents with tens of thousands of employees and 10 to 20 years of maturity would normally be an impossible task,” said Alex Austin, chief executive of adtech group Branch. “Unless,” he added, “you were somehow able to disadvantage those competitors on your platform”.
Apple has long been the major Big Tech outlier for not engaging in “surveillance capitalism” — the practice of giving customers free services but then profiting off their data by targeting ads at them.
“We could make a tonne of money if we monetised our customers — if our customers were our product,” chief executive Tim Cook said in 2018. “We’ve elected not to do that.”
But with Apple twice expanding where developers can buy ads in the App Store in the past two years, and making plans to expand much further, critics see Cook undertaking a notable U-turn.
David Steinberg, chief executive of Zeta Global, a marketing technology company, said Apple was being “Machiavellian” and “brilliant” by adopting privacy rules that forced rivals to rebuild their ad infrastructure, simultaneously creating an opening for itself to fill the void.
“They could build out (their advertising business) dramatically (and) the ‘air cover’ is they are protecting the consumer’s privacy,” he said.
Apple declined to comment on its long-term ambitions. But job ads tell prospective employees that its goals are nothing less than “redefining advertising” for a “privacy-centric” world.
The 216 jobs Apple seeks to fill include product designers and managers, data engineers and sales specialists.
An ad for an engineering leader, posted on August 24, refers to “Apple’s most confidential and strategic plans” and describes how it wants to “build the most privacy-forward, technologically sophisticated . . . Supply (Marketplace) Platform and Demand Side Platform”.
These are the main components of an adtech business in which advertisers could buy and sell ads on multiple exchanges, potentially placing ads in mobile apps downloaded from the App Store. Apple could plausibly consider mobile apps “first-party” data because all the activity is happening on the iPhone, aligning with its own privacy rules that prohibit the unconsented tracking of users across third-party apps.
The roles are mostly in the US but include at least 27 positions in Europe, 12 in China, 12 in India, four in Japan and two in Singapore.
“That’s a giant team — that’s bigger than most small companies,” said Arenstein. “Wherever there is smoke there is fire, and that’s definitely some smoke.”
Apple has never been against advertising per se. Company founder Steve Jobs even tried to launch an in-app ads business in 2010 so iPhone apps could stay free. What Cook is against is how personal information is bought and sold by opaque third parties without iPhone users giving consent.
Still, Apple setting the rules for how ads should work, and then expanding into that very area, strikes many observers as problematic.
“Right now it is safer — in terms of the surveillance economy — to use an Apple phone versus a Google phone, because Google has architected its products to serve surveillance, whereas Apple is not, at its core, an advertising company,” said Claire Atkin, cofounder of Check My Ads, a watchdog. “But if Apple suddenly delves into that realm they won’t have that competitive advantage.”
Apple may be putting its reputation at risk if consumers and regulators balk at its privacy argument — a major component of recent iPhone campaigns. If its argument wins out, Apple would have an open runway.
Margo Kahnrose, chief marketing officer at Skai, an omnichannel ad platform, said it “makes absolute logical sense” for Apple to build its own ad network, following in the footsteps of Google, Facebook and Amazon.
The power in adtech, she added, had for years been flowing from the decentralised “open web” to “walled gardens” maintained by single companies that can manage how ads are bought, served, measured and reported.
“The world has been unnerved by Apple’s ambitions for a long time,” she added. “There are a handful of players that obviously have disproportionate amounts of power, and Apple is the sleeping giant.”