Apple Tests AI-Powered Ad Tool Similar to Google's Performance Max

Reports suggest that Apple is experimenting with a new AI-driven strategy to procure ads within its App Store. The tech giant is currently piloting a tool with select advertisers that automatically determines the optimal placement for ads within the App Store, similar to Google's Performance Max and Meta's Advantage+. 

Currently, Apple's ad formats encompass various placements within the App Store, including search tab ads, "you might also like" ads on app product pages, and those featured on the "Today" tab.

With this experimental tool, advertisers input their budget, cost-per-acquisition target, audience preferences, and target countries, empowering Apple's algorithm to ascertain the most effective placement across available formats.

While Apple's initial focus appears confined to App Store placements, industry experts speculate on potential expansions across other Apple properties. Analysts note that automated tools like these typically necessitate diverse placement options to maximize value.

Although it is uncertain whether Apple will extend this tool beyond the App Store, several industry commentators have previously suggested potential ad integrations in various Apple platforms, such as Maps, Apple TV+, and its Books app.

Moreover, Apple's recent launch of a Sports app could introduce additional opportunities for ad placements, reflecting the company's evolving ad strategy and potential to capture new revenue streams.

Apple’s AI Plans

Apple's venture into AI-driven ad optimization aligns with its ambitious revenue targets, particularly within its burgeoning ad business, expected to reach US$ 7 billion in revenue this year. While the majority of this revenue stems from App Store search ads, recent developments indicate a diversification strategy. 

Notably, Apple has expanded into ad integrations within its Apple TV broadcasts, signaling broader ambitions in the advertising space. Additionally, strategic hires in adtech and TV-ad sales further indicate potential growth avenues for Apple, potentially including the introduction of an ad-supported tier for Apple TV+, akin to competitors like Netflix. The evolution of Apple's ad business could redefine its revenue landscape and solidify its position as a major player in the digital advertising sphere.

While historically reserved about AI, the company’s recent marketing narrative surrounding its M3 MacBook Air shows a newfound emphasis on AI capabilities within its hardware offerings.

Recently, even CEO Tim Cook said that Apple is apparently going to “break new ground” with generative AI this year.

Speculation suggests potential enhancements to Siri, Apple's voice assistant, with rumors suggesting a transition to “AppleGPT,” an LLM chatbot like ChatGPT. Users are also hoping for visual generative AI features within Apple's Photos and iMovie apps, promising intuitive editing capabilities and enhanced user interactions like Google’s features for the Pixel phone series.