Apple Considers Controversial Feature That Could Raise This $11 Billion Industry

It’s hard to call Apple an underdog. It is the world’s most valuable company, not to mention the most profitable. However, when it comes to maps, Apple is way behind Google.

To be fair, Apple Maps has come a long way since the days when it would give you directions to turn down roads that don’t exist. At the time, even Apple admitted it was so bad that it apologized and suggested users choose an alternative.

Over the past few years, Apple has worked hard to make Maps a worthy competitor, with features like “Look Around,” which lets you see different cities at street level, similar to Google’s Street View. Apple has also added features such as transit information with real-time departure and arrival updates, as well as augmented reality turn-by-turn directions. Yet Google – along with Waze, which also owns it – controls more than 80 percent of the market.

To be honest, I usually prefer Apple Maps over Google’s version. One of the biggest reasons has always been that Apple Maps has no ads. That may change soon.

According to Bloomberg’s Mark Gurman, Apple has plans to triple its advertising business. A big part of that plan is to expand its ads beyond those apps to places like Maps.

That makes sense, because advertising in Google Maps is expected to bring in $11 billion in revenue next year (the company isn’t specifically breaking it out). It is the card advertising industry. Sure, those aren’t iPhone sales figures, but it’s a lot of money, and Apple wouldn’t mind taking some of it.

That drives a lot of people crazy, usually for two reasons. The first is that people generally see advertising as a way to subsidize a product. The point is that Apple makes premium products that it sells at premium prices. It also prides itself on creating a premium experience for its users. There is no way to paste ads into an app and make it feel premium – especially not the way Apple has done it until now.

The other reason the move is controversial is Apple’s move to restrict tracking on the iPhone. The company claims this is in the name of privacy, but it also has the effect of cutting off data flow for digital advertising platforms like Facebook by requiring them to ask for permission before tracking users’ activity across apps and websites.

However, if Apple sells the ads, it would likely take into account first-party data, which doesn’t have the same restrictions as third-party developers like Facebook or Google. Even if the company is doing the right thing for the right reason, it certainly seems useful that Apple’s changes are hurting Facebook’s advertising business while it plans to build its own ad business.

I think it’s worth mentioning that – of any product you place an ad in – maps is a logical place. More importantly, if you run a small business, the opportunity to showcase your restaurant, store, or salon to people looking for that one thing is huge.

It is also noteworthy that Apple’s history of advertising products is bad. At one point, developers were able to sell ads in their apps, with Apple controlling the process. It was a flop. Now, Apple’s advertising is mostly limited to the App Store — where developers can buy search ads — and the News and Stocks apps. The last two are particularly bad if, for no other reason than the ads, are ugly.

However, the App Store is the cautionary tale people refer to when they object to Apple’s expansion of its advertising business. Currently, developers can buy ads in addition to search terms. That sounds good, except it often means an app won’t show up as a top result, even if you search for it by name. Any competitor can just buy an ad and appear above the app you’re looking for, effectively forcing developers to buy ads to promote their app to people who are already searching for it.

That’s a perfectly valid point, which Apple should try to resolve, regardless of its growing advertising ambitions. On the other hand, if Apple can figure out a way to include ads in Maps, it doesn’t have to be terrible. It could even pressure Google to improve its own advertising products – something that would be welcome in a world where it seems that every Google search is just an excuse to show users an increasing number of ads.

If Apple is serious about growing this part of its business, it’s going to have to get better, otherwise advertisers will just spend their money elsewhere, like Google Maps. On the other hand, if it does it right, it can turn an entire industry upside down.

The opinions expressed here by Inc.com columnists are their own, not Inc.com’s.

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