Apple is preparing to introduce advertisements within its Maps application, as part of a broader strategy to increase revenue from its services business. According to individuals familiar with the matter, an announcement regarding this initiative could be made as early as this month. The system will function similarly to the advertising mechanism in Google Maps, enabling retailers and brands to bid for ad placements based on search queries. For example, a restaurant could bid on a specific search term. When a user searches for that type of food, the location advertisement from the highest bidder would appear at the top of the search results. This approach is comparable to methods used by Yelp Inc. within its application and website. Growth in advertising revenue is expected to strengthen Apple's services segment. This business already generates over $100 billion annually for the company and now accounts for more than a quarter of its total sales, a significant increase from less than 10% a decade ago. However, Apple's services business faces challenges, as regulators are pushing for changes to its App Store model. Additionally, the company's multi-billion dollar search agreement with Google faces potential threats due to the shift towards AI-driven search. An expansion in advertising could help offset slowdowns in other areas. According to data from Emarketer, Apple's advertising business remains relatively small but is projected to generate approximately $8.5 billion in revenue this year. Reports earlier this year indicated that advertisements would be coming to Apple Maps. The advertising division is led by veteran executive Todd Teresi, who reports to Eddy Cue, Senior Vice President of Services and Health. Last year, the company rebranded its advertising business from Search Ads to Apple Ads, signaling its expanding ambitions. Under Apple's plan, these ads could begin appearing in the Maps application on iPhones, other devices, and the web as early as this summer. This move follows the recent addition of new advertising slots within the App Store. Furthermore, the company is generating ad revenue on its Apple TV platform through its Major League Soccer subscription package. Apple has also been working to sell more advertisements within its News application. In addition, the Cupertino-based company recently made adjustments to its podcast service to simplify the process of embedding advertisements.
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