📲Apple’s ad empire

The Hustle

In 2015, Maine scrapped its review process for vanity plates, and some drivers decided to have some fun… too much fun, it turns out.

A law banning profanities went into effect Monday, and the state will start recalling existing plates deemed too profane this winter. Of the 121k vanity plates in the state, ~400 will be subject to recall, including one that simply reads “F— YoU.”

Today’s rundown:

  • Search Ads: Apple’s next $20B revenue stream.
  • Pet profits: The pet-sitting business is booming.
  • Buyer’s remorse: Zillow is pausing its iBuying operation.
  • Around the web: The list to end all lists, a “Squid Game” remix, and flight attendants’ secret beds.

Let’s do it.

The Big Idea
Apple Advertising

One of Apple’s fastest growing revenue streams? Advertising.

Under Steve Jobs, Apple dropped some of the most memorable ads of all time, including:

  • “1984” which ran during the 1984 Super Bowl and staged a direct assault on IBM
  • The “Get a Mac” campaign starring Justin Long, which took aim at PCs

Now, the most successful hardware company of all time is cashing in on its own advertising business, per the Financial Times.

Search Ads is a secret juggernaut

Apple launched Search Ads in 2016 to give developers an easy way to get their app in front of new users. The business gained steam early, with analysts estimating the business unit did $500m in revenue in 2018.

However, a recent update in iOS 14.5 that opted users out of ad tracking by default pushed the business to the next level:

  • Apple’s ads are now responsible for 58% of all iPhone app downloads, up from 17% a year ago
  • Analysts project Apple will make $5B off ads this year and $20B per year by 2024

Before the iOS update, data on ad performance was available in real time and down to the individual user. Now, data is delayed up to 72 hours and only available in aggregate — a huge blow to Facebook, Google, Snap, and TikTok.

But it’s not hurting everyone

The lack of transparency on Apple’s devices has pushed marketers to spend more on Android, pushing the ratio of spending from 50-50 to 70% Android, 30% Apple.

Apple is also facing criticism for giving itself a free pass when it’s unclear if the company is in compliance with its own privacy rules.

Regardless, with its growing focus on services and massive investments in Apple TV+, this could be just the beginning for Apple’s ad empire.

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SNIPPETS

Ecomm IPO: Saks Fifth Avenue’s ecommerce unit, which split from the brick-and-mortar business, announced it is prepping for an IPO. #ecommerce-retail

Elon’s waitlist: Tesla delivery times for the Model X pushed to nearly a year. #clean-energy

Big deal: Deel, a remote hiring platform, raised $425m at a $5.5B valuation. #emerging-tech

Channel hack: Sinclair announced that a ransomware attack was responsible for a disruption to its TV stations. #privacy

The big crypto-short: Michael Burry, subject of “The Big Short,” used Twitter to ask for help shorting cryptocurrencies. #fintech-cryptocurrency

Scammer’s paradise: Facebook Marketplace reached 1B users and has become a hotbed for scammers everywhere. #big-tech

Pet Profits
dogs on a leash

Looking for your next gig? Have you considered pet-sitting?

Have you ever tried to introduce 2 cats? Yeah, it’s a lot of yelling.

That’s just 1 reason many pet owners like hiring a pet sitter to watch their animals where they’re comfortable versus kenneling or boarding.

The pet-sitting industry is growing

The global market was worth an estimated $2.6B worldwide in 2019 and is expected to grow by 8.7% per year through 2027, per a report from Grand View Research.

That growth is due to:

  • More households adopting pets, including ~23m additional US households since the pandemic.
  • The return of holiday and leisure travel. A recent survey from Pet Sitters International found 44% of members were booking 2021 holiday sittings 6+ months in advance.
  • An increased interest in pet-sitting among the retired, self-employed, and travel-inclined.

This is creating a range of business opportunities

For example, Trusted Housesitters: a UK-based pet-sitting network that, starting at $129/yr., offers pet owners unlimited sitting from vetted members looking to exchange care for lodging.

Or there’s Rover, the Seattle-based app that matches pet owners with its 500k+ caretakers, including dog walkers, sitters, and groomers.

Fun fact: Pet Sitters International successfully campaigned to have “pet sitting” added to the Random House Dictionary in 1997.

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Real Estate Tech
home for sale

Why did Zillow pause its home-buying program?

Zillow is seared into our brains as the go-to website for finding home prices (and snooping on the value of our friends’ real estate portfolios).

In 2018, the $22B technology firm launched a completely new business line: Zillow Offers, a home buying and selling platform (AKA iBuying).

It saw strong growth for years, accounting for more than half of its $3.3B of revenue in 2020.

Zillow is now pausing the home-buying program

Why? Per The Wall Street Journal, the company is being hit on both the demand and supply side:

  • Home sales are slowing, which hampers Zillow’s ability to collect flipping fees (ranging from 9.5%-22% of home sale price)
  • A shortage of construction workers prevents Zillow from renovating the homes it purchases

One analyst tells WSJ that Zillow may have over-purchased homes.

Zillow Offers is very cash intensive…

… because the company has to put the homes on its balance sheet. Even with the pause, Zillow has 3k+ homes (valued at ~$1.2B) to unload.

The change comes a few weeks after Zillow came under fire over a viral TikTok video accusing it of buying up blocks of homes and manipulating home prices.

To add insult to injury, its main competitor — Opendoor — says its iBuying business is trucking along with 8.2k new home purchases expected in Q3 2021.

As long as nothing happens to the “Zillow Gone Wild” Instagram account, we’re cool.

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AROUND THE WEB

🎭 On this day: In 1973, the Sydney Opera House opened after 14 years of construction.

👂 Useful: Frank McShan shares tech tips and tricks on TikTok, including this 1 about how to add background sounds in iOS 15.

🐒 Wow: 2021’s Wildlife Photographer of the Year winners are out. The images include everything from adorable animals and breathtaking captures to some serious nightmare fuel.

🧐 Rabbit hole: Wikipedia’s Lists of Lists of Lists article is a list of articles that are themselves lists of other article lists. Example: Lists of fictional lifeforms > lists of legendary creatures > lists of dragons.

😴 That’s interesting: Where do flight attendants sleep on long flights? In these tiny hidden pods.

🚦 Haha: And now, the “Squid Game” remix you never knew you needed: a surprisingly chill version of the “Red Light, Green Light” song.

Tweet of the day
processors

Source: Twitter / @Kenshirriff

On Monday, Apple unveiled its new line of MacBook laptops, which run on the company’s own M1 chip. Apple’s journey to creating its own chip — instead of using ones from Intel — took more than a decade, as we previously covered.

More broadly, the tweet above shows how incredibly far the industry has come: In 1985, an ARM1 processor had 25k transistors while Apple’s M1 Max processor boasts a ludicrous 57B transistors.

THE HUSTLE

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