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Apple's 'Incredibly Powerful' Mobile Advertising Strategy — and What It Means For Your Privacy

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(Photo: Mario Tama/Getty Images)

Apple will begin tracking app users' browsing data Monday as a way to boost developers' profits and increase its presence in the mobile ad market.

Apple founder Steve Jobs said in 2010 that the company's advertising platform, iAd, would extend to 50 percent of the mobile market. But effective mobile advertising is proving to be much different than advertising on a desktop computer, Digiday reported.

(Photo: Mario Tama/Getty Images) (Photo: Mario Tama/Getty Images)

“One of the big limitations of not just iAd, but the entire iOS ecosystem, is that cookies don’t work. If Apple can bring very advanced targeting combined with e-commerce, it will be incredibly powerful.” said Eric Franchi, co-founder of cross-device ad network Undertone.

Digiday reported Wednesday the company will begin using customers' browsing data within third party apps for more effective advertising. While Apple reportedly isn't concerned for its own revenues, ApplePay is seen as a way to help its developers gain more profit from iOS than from Google Android.

So how exactly will it work? Digiday provided one scenario:

"Say, for example, a visitor to a retailer’s iPhone app adds a pair of shoes to his cart but ultimately decide not to buy it. In this scenario, the retailer will now be able to retarget that user with an ad for that exact pair — even in another app on his iPad. When tapped, the ad would direct him back to his abandoned checkout page and automatically add the shoes to his online shopping cart."

Reaching just 2.6 percent of the entire mobile ad market, Apple trails Google (37.7 percent), Facebook (17.9 percent), Twitter (3.5 percent), Pandora (2.9 percent) and Yellow Pages (2.7 percent).

Apple currently gives publishers 70 percent of the revenue it gets from apps. Its mobile ad revenue for all of 2014 is projected to be $487.1 million per e-marketer. That means mobile ad revenue made up just 1.3 percent of its overall profits in the third quarter.

Apple did not immediately respond to TheBlaze asking whether the company stands by the following statement written by CEO Tim Cook and published on the "privacy" page of its website:

"Our business model is very straightforward: We sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t “monetize” the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple."

Users who use to opt out of targeted ads can go to "Settings," "Privacy," and then "Advertising" on their iPhones.

Follow Jon Street (@JonStreet) on Twitter

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