Despite massive size and overwhelming popularity, Apple has struggled to court Madison Avenue's influential media buyers, the people at advertising agencies who decide where to spend the budgets of the world's biggest brands.
According to a new report form Ad Age's Kate Kaye, this issue is due in large part to the company's refusal to share valuable consumer data with its advertising partners, meaning that brands are not able to pinpoint prospective customers with nearly the same precision as they can advertising with Facebook and Google.
Here's how Kaye said one executive described Apple's decision not to provide information about individual consumers to its advertising partners on the iAd network, which sells in-app ads on iPhone, iPad, and iPod Touch devices:"One person familiar with the situation exec said Apple's refusal to share data makes it the best-looking girl at the party, forced to wear a bag over her head."
To explain the metaphor, Apple is the best-looking lady at the data party because it knows the names and addresses of its customers, as well as which apps and music they've purchased and where those purchases were made from. In theory, Apple could track this individual data with cookies and allow the advertisers to use them to make automated ad purchases based on a combination of Apple's data and information the marketer collected elsewhere.
But, continuing the metaphor, Apple is wearing a bag on its head because the company instead forces to advertisers to target "audiences" — groups of consumers that Apple promises have certain qualities in common, like music purchase history or location.
The article goes on to say that it's no surprise that Apple's $258 million in mobile ad revenue in 2013 pale in comparison to Google's $3.98 billion mobile haul, or even the $1.53 billion in mobile revenues Facebook generated.
While it's true that Google and Facebook have both worked hard to form relationships with media buyers and provide products that make them more appealing companies to spend money with, the difference is that, unlike those advertising-focused companies, Apple makes the lion's share of its money selling products directly to consumers. The $258 million in mobile ad revenues is spit in the bucket compared to the nearly $58 billion it made in its most recent quarter alone.
In order to keep its primary business — selling iPads, Macs, and iPhones — strong, it's important for Apple to maintain consumers' trust that buying one of those products won't mean exposing their data to undesirable third parties.
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