Apple’s Edge Over Facebook And Google

When we discuss the rivalry between Facebook, Apple, and Google, we’re talking about them as ad companies trying to invent the next ad platform. Well, given what the next platform will be, Apple has a distinctive edge over Google and Facebook, and they’re already starting to leverage it.

Last week, Apple launched iAds, a platform that lets advertisers target users through existing iPhone apps. And to target those ads, the iGiant is letting advertisers tap into the data of over 150 million iTunes users.

This means that advertisers will have an additional layer of data through which to target iPhone users: purchasing history. That’s a data set that might prove more valuable to advertisers than any other.

The Mobile Frontier

When it comes to online advertising, Facebook and Google have very different business models (each with their pros and cons), but they’re still just showing conventional online ads. The real next frontier in digital advertising is mobile because mobile offers better targeting and is open to more possibilities.

With mobile, you cannot only target ads according to search history, social graph, and IP, but physical location. This could make digital larger than any other ad medium because it opens up so many more possibilities — from geo-targeted coupons and expiring offers from nearby points-of-sale, to ads for mom-and-pop shops just around the corner. Indeed, mobile advertising will really expand horizons for both performance-based ad models and targeting abilities.

Facebook and Google are foraying more and more into the mobile space, but Apple has been there longer. And while Apple hasn’t been there that much longer, it might just be enough of a lead to put them first past the post — or at least the first post, anyway.

Apple’s Lead

The iPhone has been on the market since January 2007, and there are over 200,000 thousand apps available. Google’s Android was only released about a year and a half ago and there are tens of thousands of apps available. Facebook has no mobile OS (but might be working on it), and has only its own mobile app for use on other OS’s.

So Apple has been collecting data on 150 Million iTune’s users’ behavior, location, and purchasing habits through over 225,000 apps over 3.5 years. This gives them a considerable edge in targeting ads.

Google’s Android may be on more devices, but Google lacks the years of valuable user eCommerce data that Apple has through the iTunes store.

And as Bloomberg recently reported, they seem to be handling user privacy better than Facebook has recently:

Apple doesn’t share information on individuals […] Instead, [advertisers] can choose to advertise in certain “buckets” of applications, such as those on news or entertainment, based on characteristics of its users.

In designing its own ad platform, Facebook has often struggled with user privacy. They’ve amassed heaps of data on users’ “social graph”, but haven’t been able to give away that data without giving away users’ identity because the entire Facebook system is driven by identity.

You don’t install an app on a device, you install it on your personal profile. This means that app developers don’t just get access to your user behavior, but your personal network and life.

With an iPhone App, however, the developers have no way of knowing which “John Smith” a device is owned by. They can’t access his personal life or anything that gives away his identity.

But Apple can see what apps he’s purchased, installed and what you used them for. This data offers insight into your interests and purchasing power, and that’s something that advertisers can really use to target their message. After all, money speaks louder than words.

Nothing’s Certain

For decades, services such as Air Miles offered marketers data on consumer purchasing habits. Then the internet allowed us to target them based on sets such as search query and social graph. Now, the mobile web is bringing these possibilities together because it is both physical and digital.

For the moment Apple does seem to have a bit of a lead in the way of mobile ad delivery. But there are dozens of steps between launching iAds and iAds becoming the Adwords of mobile. A single wrong step at any turn can very easily cost them their lead.

What is certain, though, is that marketers need to start looking at targeting in different ways. Apple may or may not become the dominant mobile ad platform. But it’s more likely than not that mobile will the next dominant ad medium.

About CT Moore

A former Staff Editor here at Revenews.com, CT Moore is a recovering agency hack with over a decade experience leveraging search, social media, and content marketing to help brands meet their business goals online. He currently provides digital strategy consulting to start-ups, SMBs, enterprise level companies through his consultancy Socialed Inc.. CT is also an accomplished blogger and speaker who educates groups and companies on how they can better leverage different online channels.

Twitter: gypsybandito

5 Responses to Apple’s Edge Over Facebook And Google

  1. Shirley says:

    Mobile does overcome some of PC's browsing data inaccuracies – say, it's a lot less likely for people to share the same mobile phone and most people would only use one mobile. Even though, many people may have a second handset from work, it's less likely they would purchase app / itune for personal use on the work phone.

    So, Mobile may become the holy grail to persona-based targeted online ad channel.

  2. andrew wee says:

    This all sounds great in theory, but stuff in practise is a whole new can of worms.

    I've been covering LBS (location-based services) since the 1990s, and all the theoretical situations like having a pizza parlor blast a coupon to your cell when you're in close physical proximity has come to naught.

    I am guessing it will be another 3-5 years before we see any serious implementation of this technology, even if services like foursquare hit critical mass in terms of installs and active users.

  3. CT Moore says:

    @Andrew, I know what you mean in terms of LBS never really hitting the potential it has. But I think we're quickly approaching the tipping point.

    For instance, some newspapers are already partnered with FourSquare to geo-target restaurant reviews: http://mashable.com/2010/01/25/foursquare-metro-n

    While that isn't exactly geo-targeting the ads, it is still geo-targeting the content. And besides, there are ads next to those restaurant reviews, so I guess the question is whether the newspapers ad servers can geo-target on that level.

    And I guess that's what it comes down to: the ad platform. Plenty of people see the potential but haven't developed the technology. Similarly, many ad platform companies (who have the capital and infrastructure to invest) haven't taken the leap yet.

    So while Apple might not be the next Adwords, they may very well inspire someone else to take a step in that direction.

  4. Apple has a proven track record with using devices to monetize the iTunes Store. THeir marketing is truly cutting edge. It willl be interesting to see how they use that iTunes Store data to monetize their device user-base in the near future.

    Similarly, they are one of the greatest sales organizations ever. Check this out: http://www.pcmag.com/article2/0,2817,2366378,00.a

  5. CT Moore says:

    @Marianne, I agree that Apple has excelled at the cross promotion of their products. Personally I think that iPod/iTunes and the iPhone/App Store were their greatest successes yet.

    When it comes to video phones, though, I think I'll hold off on placing bets just yet.