That’s an ad.

In the sense that you’d see a big sign for Duncan Donuts if you were standing in front of the store, yes.

That's signage. No different from you adding a homescreen shortcut to a website, or a pin on a map.

I get in my car. The weather app is suggested to me, because I oftentimes, when getting into my car, want to check the weather. This is innocuous; definitely not an ad.

I get in my car. Candy Crush 2 is suggested to me, because I oftentimes, when being driven around by my wife, play games.

At a surface level, one could argue: Candy Crush did not pay for that impression, its not an ad. On the other hand; Candy Crush does pay Apple 30% of every transaction in the app; and that service fee includes not only access to market on the iOS App Store, but also, critically, access to be installed at all on iOS. Developers pay Apple to be allowed to install Applications on users' phones; any installed application could be given preferential display by iOS in suggested applications, location based suggestions, etc; Apple has a monetary interest (30%) in suggesting applications which would generate revenue for both them & the developer; the algorithms which power these application suggestions are black-boxed and poorly understood by consumers.

Similarly; I drive up to Starbucks, and iOS displays the Starbucks application. The innocuous argument is: arrive at location -> many users open this app at this location -> presenting it is convenient. The "weirder" argument is: arrive at location -> Apple wants to keep Starbucks happy, in the App Store, and using Apple Pay -> presenting it is monetarily beneficial to Apple & Starbucks, Starbucks knew that their app could be presented like this and approved of it, and thus its an Ad. Critically, there's nothing different about these two situations beyond intent, and to some degree that just speaks to the fact that we live in a capitalist society. But I label the situation "weird" for a reason. And "weirdest"? Arrive at location -> There's a starbucks & a panera bread right next to each other -> iOS can only recommend one application, so which does it choose? This is where being explicit about "this is an ad" actually matters; its no longer a matter of convenience or "wow that's cool", its a matter of "a billion devices are now pushing their users to make getting coffee at Starbucks a little bit easier than Panera", and that's not ok even if the intention is totally ethical.

I think there's an argument, maybe not a strong one but extant nonetheless, that any "preferential display" iOS exhibits toward one app over another, anywhere on your phone, is advertising, simply due to how intertwined their megacorporation interests & reach is with how money flows through their platform.

Whether if they're ads or not, these preferential display recommendations also end up entrenching the top apps, which doesn't exactly help discoverability for new players.

Only if they're being paid to show it - which I'm not sure is the case here.

If the app is monetized then apple makes money if you use the app. It’s in apple’s interest to advertise things to you. Doesn’t matter if it’s paid for.

How is Apple making money from a company that makes a free app and sells physical goods?

They're giving them a free platform, on the iPhone I paid for, to promote their products by-default. That's an ad.

Via Apple Pay, which is the default selection for payment.

When I plug my phone into my car in the mid afternoon, maps suggests I drive to the YMCA. Is that an ad for the YMCA?

Why is the maps app making any suggestions at all?

As much as Google apps annoy me (Android user), at least Google Maps still acts like a dump pipe. Silent unless called upon.

Because I drive there often at that time, and it saves me typing in the address manually.

That's different from what the OP was saying, which was seeing a Dunkin Donuts app recommendation, while he was in a different city, and didn't have a history of going to DD.

So your thing is not an ad, just an unnecessary reminder. I imagine after going the first couple of times, you don't need navigational assistance to get there.

How do you know that? Maybe OP often goes to their local DD.

OP: I've never used the Dunkin' Donuts app and had no interest.

So iOS is obviously not spying on its owner in ways that matter. If OP ordered from DD, Apple got that transaction and iOS started suggesting DD to OP across devices, that would be insidious enough to stop me from using Apple tech. Dumb location-based triggers are nothing, though I don't have them on because I need fewer distractions.

What feels as spying to me is, for example, seeing a specific medical care ad on YouTube after I talked to a friend about a health issue using a completely unrelated chat app or even IRL. There are clearly a lot of moving parts, a bunch of data stored outside of my device, and if it's not already tied to my identity it's likely de-anonymizable.

I at least personally appreciate it because when I get in my car after class (to drive the place I drive 90% of the time after class–home) it'll push an ETA onto my lock screen. It's not always right but it's generally very predictable (and can be disabled).