Neil Patel and Eric Siu discuss Apple's push into advertising, from selling news ads with a 70% publisher cut to its $20-30 billion annual Google search deal in Safari. Apple's ad revenue is projected to hit $11 billion this year as iPhone sales slow, especially against Huawei's folding phones in China.
I think Apple will be the next big ad marketplace, right? You have Google, you have Meta, you have Amazon. I think Apple will start really dialing it up because they just made a big move when it comes to selling news ads directly, like in news feeds and stuff like that. And if you look at iPhone sales, I don't have data on this, but Zuckerberg talked a little about this in his interview with Joe Rogan, which I'm assuming you saw, where he slams Apple.
Yeah.
You know, they haven't really invented anything great in a while. And it's like Steve Jobs invented the iPhone and now they're just kind of sitting on it 20 years later.
And Zuckerberg talks about how Apple's struggling with iPhone sales.
And they actually, I think year over year, I'm not even sure they're selling more iPhones at this point. I think like the sales might actually be declining.
And that is true in certain regions. Like today it was posted on CNBC that Apple's struggling in China. I think it's Huawei. Huawei has this really cool phone.
Huawei?
Huawei. There you go. My bad. Huawei?
Huawei.
I don't know how to say it, but they have a really cool phone that folds up. It's like an iPad, but it goes all the way down to the size of a phone.
All their Chinese phones are folding phones now.
Yeah. So when you think about what Apple's doing, yes, when you look at their revenue, it's like, do you really need to buy an iPhone 16 when you have an iPhone 15? There's not much of a difference anymore.
This is an old phone over here. You probably have an older one too.
I have a newer one.
You do?
Yeah, I always buy the newer ones. Oh, 'cause you're so rich. No, 'cause battery life.
My battery life's great on this thing. I even bring this thing into the sauna.
I talk on the phone a lot though.
Oh, you do, you do. Neil's a very talkative guy. Uh-huh.
I need the battery life and I don't want to hold a battery pack that just recharges it.
How many hours do you think you're on the phone? Let's see your screen time.
Does it show screen time? Yeah. How do I see screen time? Go to settings?
Here, give it to me.
I got it. I just typed in screen time.
All right, not bad. So, and, and as Neil finds it, publishers will earn 70% cut of the ad revenue sold by Apple within their articles, per Axios. The move could help Apple widen its advertising revenue stream and bounce back following what company anticipates will be a modest end-of-year period.
Yeah, so it doesn't show you screen time for phone calls. Yeah, it doesn't show you screen time for phone calls.
What's your screen time on average?
Um, day, week, 5 hours and 15 minutes.
Oh my God, that's a lot.
Yeah, most of my screen— I know for a fact most of my time is spent on the phone.
You're doing a lot of direct phone calls. You're not getting on a lot of Zoom calls.
Nah, I don't use Zoom that often.
Yeah, so my, my screen time is all on my computer and it's mostly Zoom calls. Um, but this is kind of crazy. They, um, they're what? They're expected to do $11 billion this year, up from $8.9 billion last year.
In ad revenue. And I believe it's going to explode because the reason Apple does well—
Services.
Services. And they have a massive ecosystem of hardware so they can continually leverage it. And they always tell everyone, hey, you know, for privacy and security reasons, we can't let you tap in and do whatever you want, but we can do whatever we want. And I don't mind that because I actually love Apple, their hardware products at least. And what I believe is going to happen, and that's going to be a big monetization push, they make a killing from Google and I count that as ad revenue, but it's not ad revenue, right? For Google to be placed as a default search engine within Safari, that's a big one. I don't know how big that chunk is. I believe it's like $20 or $30 billion. Apple, Google default search revenue, $20 billion a year. So if they're getting paid $20 billion a year and you're saying they're already at what, $11 billion?
Yep.
I consider that Google revenue, ad revenue, because if they didn't have that, they were getting a percentage of the cost per clicks and the advertising fees, all right? So they're already at $31 billion a year. Now they're integrating ChatGPT into Siri. Imagine all the people that's going to use it. Wait for ChatGPT to monetize and guess what Apple's going to do?
All right, so I wanted to take a moment to tell you about my podcast co-host Neil's agency called NP Digital, and they work with a whole host of global companies or global organization. Also, Neil has SEO tools such as Ubersuggest and AnswerThePublic. All you have to do is go to npdigital.com to learn more and we'll see you on the other side.
They're going to take a cut for having ChatGPT as a default. In essence, they're getting a cut of the ad revenue once ChatGPT monetizes. They're not doing it now, but they eventually will do it.
And their cut is always what?
30%.
30%. So anyway guys, that's it for today. Please don't forget to rate, review, subscribe, and go to marketingschool.io/agency if you want to join 50+ other agency owners to grow your agency faster.
