Hello and here’s a warm welcome to the 300 odd new subscribers since my last post.
I know, you guys have been missing me. Last month has been a whirlwind of dealmaking, firefighting and a couple of burials. Seeing hard work go to waste is tough, even if it isn’t one’s own.
I also started writing a post on P/NP - a rather famous, yet unsolved problem of mathematics (and computer science). Am still digging down that rabbit-hole. It’s a little hard to make it layman friendly - But I will yet succeed.
Today’s post started with a conversation with someone who visited this year’s Cannes Lions International Festival of Creativity. Apple and Amazon had insane presence here. Apple seemed to be having very secret and intense meetings with senior media executives and was doing a full-court press. Now, I get why Amazon may have been there - They have a large ads business.
But Apple? Secret Ads business? Seemed almost Lex Luthor-ly.
So I started looking at who Apple is hiring. Jackpot!!
Apple has been hiring crazily for its ads vertical1 in 2022. As an example, Apple is looking for a Senior Manager for a Demand Side platform in its Ads Platform. The right hire will “drive the design of the most privacy-forward, sophisticated demand side platform possible.” They will have experience “building a mobile-centric DSP” and know-how in optimizing “mobile campaigns using measurement and attribution.”
Additional requirements include 8+ years of experience and a proven track record of building and launching “advertising related products for audiences in the hundreds of millions.”
Now, Why does Apple need such hires? Lets see.
Context
In its public posturing, Apple has long been an advocate of user privacy - to the extent that it claims to be the only privacy game in town and even used this point as marketing copy.
Apple has worked on years-long projects to remove or reduce the ease with which the marketing industry and middlemen in particular, can target those using its devices.
This began with the introduction of Intelligent Tracking Prevention which effectively disabled the use of third-party cookies2 in the Safari browser. Then, about two years ago, Apple completely blew up online advertising by tossing a small pop shaped hand grenade into the mix. I of course, refer to the opt-in for ad tracking that Apple introduced with IOS 14.
When Apple’s WWDC 2020 Keynote started, all eyes were on the game-changing Apple Silicon chips.
But most ad networks/ ad tech cos / advertisers looked in horror as Apple unveiled the new privacy features that sent shockwaves through the industry.
It made the IDFA, (the advertising identifier) irrelevant. Most companies like Google and Facebook use this IDFA to track activity for advertising purposes on IOS devices. Now, unless a customer opts in, the IDFA is not available to an app. Which means they can’t follow you on the web anymore.
Think about it. A small pop-up. Explicitly asking apps to take permission. It cost Facebook alone $10bn.
Google also made noises about similar privacy commitments, but let’s be honest, nothing is gonna come out of it. Its entire stack is built for enabling advertising and advertising alone. When I graduated from college in 2006, it was hard conceive of a day when Google will be the evil, soulless tech giant and Microsoft the do-gooders. Guess what, that day is here, but I digress.
Ok. So let’s revisit the question. Why does Apple need to hire a Senior DSP Engineer?
Wait - What is a DSP?
A DSP is a core part of the advertising stack for any Adtech company. Very simply, a DSP is a software that allows a marketer to automate the advertising. It allows advertisers to buy ad spaces across various digital media channels programmatically. DSP connects advertisers with data providers and supply-side platforms (SSPs), which represent publishers.
The automation is the key part here - easier advertising leads to more media dollars spent. The DSP targets specific users based on their behaviors and preferences. Depending on the provider, DSP can provide targeting options based on geolocation, type of device, browser, domain URL, and the traffic category.
The DSP and its feature set is often a statement of Intent. You can learn a lot by seeing the features the DSP offers.
Hold on - Wasn’t Apple Pro Privacy and All?
Well,
You see, I think that even as Apple was blowing up the entire digital ads ecosystem on IOS / Apple devices for others; it left enough foundation for itself to build its own, more focused ads platform. AKA - the Amazon Playbook.
Now, it remains unclear if the DSP in question is intended to work only on Apple properties (e.g. Apple news or app store) or on the millions of IOS apps and the larger web, but going from one to other would not be very difficult - at least technically3.
So, what changed? Apple was hell-bent on kneecapping advertising. Now it seems to be embracing Advertising.
I think Apple has been watching others make merry in it’s own walled garden and now wants the lion’s share of media spends there. DSPs are expensive to build. You do not build them on a whim unless you are serious about making a serious grab for media dollars.
See, Apple’s walled garden is vast. They have focused on seamless user experiences. What ties your mac and ipad and iphone and your airpods together is tons and tons of user data. With its own DSP, Apple will have full control of how and where this data is used, preventing leakage of this very valuable data outside their walled garden. Oh and BTW it fucks royally with Google and Facebook. So win-win I guess. We have seen this playbook before with Alibaba, JD.com and Amazon - all of whom have their own, internal, extremely profitable ad networks.
You may still have some doubt over my analysis. After all, I am a noted Anti-apple person who firmly believes that apple fanboys pay ridiculous amounts of money every other year for very slight improvements in capability.
Well, you don’t have to rely on me anymore. As recently as July 29, Apple briefed media outlets with news of increased advertising opportunities4 on the App store.
Apple goes on to state:
“Like our other advertising offerings, these new ad placements are built upon the same foundation — they will only contain content from apps’ approved App Store product pages, and will adhere to the same rigorous privacy standards.”
If it’s going to be anything like Amazon’s ad business, I call bullshit5.
Asides
I think I have discovered the song that plays everytime Bezos walks into a room. Do Listen.
An excellent podcast on what “Focus” even means for trillion $ companies. Ben Evans’s thoughts are remarkable in their clarity. Listen here.
Visa is being lumped in with Pornhub and accused of profiting from sexual exploitation of Children. Here.
Remember Clubhouse? It is Pivoting. Openness and Inclusion are being replaced by Selectiveness and Curation. Click below to read the entire twitter thread.
Housekeeping
As always, I look forward to hearing from you. If you liked this post, pls feel free to share this or subscribe to this newsletter using the links below. I try to write a 1000-2000 word essay once every two/three weeks.
Revenues generated by this unit are included in the “services revenue” of Apple’s P&Ls. This vertical also includes Apple Music, TV+, Games and so on. This revenue vertical generated $19.6 billion during the June quarter of 2022.
Third-party cookies are cookies that are set by a website other than the one you are currently on. For example, you can have a "Like" button on your website which will store a cookie on a visitor's computer, that cookie can later be accessed by Facebook to identify visitors and see which websites they visited. Such a cookie is considered to be a 3rd party cookie.
Another example would be an advertising service (ex: Google Ads) which also creates a third-party cookie to monitor which websites were visited by each user. This is the main technology used to show you products that you previously searched for on a completely different website.
Of course, the opening up of Apple’s walled garden will have serious second and third order effects but let’s wait and watch for now.
The planned ad placements include two additional slots in the App Store with a promotional placement on its “Today” tab where the paid-for slots will feature alongside editorialized content. The other planned ad placement will feature on app product pages where ads will be served under a tab that reads “You Might Also Like.”
Or to be more precise, “Ghanta!!”