Apple has initiated testing of a new AI-powered tool designed to automatically optimize ad placement within its App Store. The tool is similar to Google’s Performance Max and Meta’s Advantage+. In addition, it is currently undergoing testing with a select group of advertisers.
How does the Tool Work?
Sources familiar with the matter revealed that advertisers can input their budget, cost per acquisition target, desired audiences, and target countries. Apple’s algorithm then determines the optimal placement for the ads across the four available formats within the App Store. In addition, it includes the search tab, search results page, the “You might also like” section on app product pages, and the “Today” tab.
Future Plans and Business Impact of Apple
Apple has communicated to advertisers that these tests aim to enhance the performance of its Apple Search Ads. There is an anticipation that the company will officially introduce the new product in the coming months.
This move follows the successful implementation of similar AI-powered ad products by Google and Meta. Additionally, it has significantly contributed to the growth of both companies. Apple’s tool is currently specific to the App Store. However, experts in mobile advertising believe it has the potential for expansion to other Apple properties.
Revenue Projections and Expansion Efforts
As per analysts at Omdia projection, Apple’s ad business will generate US$ 7 billion in revenue this year. As a result, it will mark a US$ 1 billion increase from 2023. The main revenue source is from the search ads on the App Store. The company has made strides in other areas, such as sponsorships and ad integrations with its MLS Soccer broadcasts on Apple TV. However, it has also made significant strides in other areas.
Additionally, Apple has made strategic hires in ad tech and TV ad sales. Thus, it signifies broader advertising aspirations. This could potentially include the introduction of an advertising tier to Apple TV+. As a result, it is following in the footsteps of rivals like Netflix.
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