Will the Erosion of Online Advertising Hurt Apple & Google?July 28, 2016 - 2 minutes read
Apple and Google couldn’t be more different. On the one side, premium hardware with an emphasis on encryption, security, and brand quality. On the other, cloud services, budget hardware, and a suite of free services that rely on data marketing. Most of us, and certainly most iPhone and Android app developers, use a combination of Apple and Google services. If either titan has their way, the future might be more of a walled garden than a shared ecosystem.
The elephant in the room is online advertising. Google is the company most vulnerable here, since so many of their free services rely on data collection to operate. It’s commonly accepted that using Google services means allowing them to build profiles and deliver advertising (in the form of AdWords or otherwise) based on those detailed profiles. Lately, however, consumers have been rebelling against the collection of data. Google hasn’t suffered much backlash thanks to their supurb, friendly brand positioning — but it opens up a chink in the armor that Apple may well exploit. Weakening revenue from online advertising, which Apple has very little relience on financially, would give the hardware company a much stronger arm in the wrestling match for consumer attention. While the affect on iPhone and Android app developers isn’t yet clear, one thing is for certain: advertising is changing, and Google will have to pivot on their data sales strategy to maintain their place at the top of the digital mountain.
While a recent report from TechCrunch suggests that Apple may be within a few market moves of a “checkmate” in the online advertising game, I tend to disagree that the change will bring Google and Apple on-par so far as valuation and revenue. For starters, Google is incredibly diversified — self-driving cars alone are poised to refill their moat, not to mention their highly valuable work in robotics and AI.
For Boston app developers, the most important takeaway from the Apple vs Google tussle is this: don’t rely on banner ads for revenue. Whoever wins the consumer hardware battle, advertising is going native faster than pundits think.Tags: iOS, iot, ipad app developer, iPhone app developer, itunes app store, mobile, mobile app, mobile app developer, monetization, startup, startup strategy, startups, technology, uber, ui design, ux design, venture capital