With its commercial growth in hardware slowing, Apple will need to expand its advertising operation to continue to grow. To do that, Ternus will be the one tasked with maintaining the increasingly untenable balance between a reputation for discretion and a need to placate marketers.
“Will Apple still approach its Ads business under Ternus in a cautious way one that protects its closed ecosystems?” said Elume founder Eunice Shin. “His job is to make sure that Apple is not compromising what it feels is the right thing for its consumers.”
Serving two masters
Already this year, the company has shown signs that it plans to further accelerate its advertising business.
In February, it announced the launch of its HLS protocol, which will enable support for video podcasts in its native podcast platform. The decision diverged from the strategy of peers like Spotify in that Apple lets podcasters choose their own hosting provider, giving them more control over ad monetization.
The next month, Apple debuted its plan to introduce ads to Maps, opening up the inventory to brands for the first time since the product launched 14 years ago.
The two developments have spurred anticipation that Apple is preparing to ramp up its advertising efforts more broadly, which has brought attention to its streaming service.
Apple TV+ is now the last major streaming platform to eschew ads (outside of sports inventory).
While the company denies that it has any plan to introduce ads to the streamer, Netflix said the same thing for years. For many, the question is when, not if, the Cupertino outfit will introduce commercials to its original programming.
Owned and operated
As Apple works to expand its advertising business, it has a unique advantage: Compared to its peers, Apple owns nearly every surface where its inventory appears giving it unprecedented control over the product.
Whether on the App Store, Maps, or Podcasts, ads in the Apple ecosystem are all owned and operated surfaces. This means that for advertisers who want to reach consumers in those environments, they have no choice but to go through Apple. This gives the company complete control over its inventory.
“In some markets, the only way to attempt to reach an affluent consumer will be through the Apple ecosystem,” said Sparrow Advisory partner Ana Milicevic. “That is a moat that can survive any perceived lag in AI-related efforts.”
That level of agency also enables Apple to control the privacy and data protection elements of its advertising, offering a key edge.
