Depending on how you look at it, Apple could increase the ways developers can directly reach customers via its App Store or build their own business at the expense of others.
What is Apple doing
Apple has had its own advertising business ever since then-Apple CEO Steve Jobs introduced us to iAds in 2010. The reach of that offering has always been limited to Apple’s platform, but the service has arguably backfired, with its technology surviving in the form of ad slots in Apple News and the App Store.
The Apple App Store currently hosts only two ad slots, one in the search tab and the other in Search Results. You can tell when you’re looking at an ad by the blue cast behind the graphic and a small blue badge that says ‘ad’ – these ads are hard to confuse with the content.
Apple now plans to add more inventory to the App Store:
- A new slot will appear in the second line of the Today section of your shop.
- Another might appear at the bottom of an App Store app list under the “You May Also Like” banner.
What Apple Says About Ads
Apple says Search Network ads provide opportunities for developers of all sizes to grow their business. “Like our other advertising offerings, these new ad placements are built on the same foundation: They will contain only content from app-approved App Store product pages and adhere to the same rigorous privacy standards,” the company said in a statement. statement to 9to5Mac.
Apple says developers will likely use these slots to reach customers they search through specific ad categories, though they won’t be able to target specific competing apps.
At the same time, the ads shown will be those considered relevant to the app you are looking at, implying that apps from competing developers will appear on some app pages.
What is interesting is the effectiveness of these ads. The the company says 70% of its App Store visitors use search to find their next app; that 65% of all downloads happen after searching; and that they see a 50% better conversion rate for search ads.
“Apple Search Ads has been the most efficient and scalable paid channel for our relaunch. We have captured a larger audience with higher intent while maintaining efficiency” Brooke Tarabochia saiddirector of growth marketing at Peloton Digital, in a statement on Apple’s website.
Apple seems to want to grow this business
Apple made several brief references to its digital advertising business during its latest financial call.
The general sentiment he shared appears to be that Apple’s advertising business isn’t really living up to expectations, which Apple CEO Tim Cook says reflects the macroeconomic environment. Cook also pointed out: “We want to empower our users and take care of their privacy. We offer search ads.”
The CFO of Apple, Luca Maestri, said something more.
“[Tim Cook] he said there are some pockets of weakness, mostly in digital advertising, that we’ll need to overcome. But at the same time, our service business grew a lot a year ago…”.
Apple criticized for expanding ad supply
Apple is facing some pushback for its decision to add a couple of additional ad placements to its service. Some argue that these ads mean Apple is placing ads above user results and adding ads to a listing page once a developer draws a user to the page.
Some developers are enraged by ads appearing at the bottom of their app list. They believe that having done the work necessary to get a potential user to their page, the existence of competitor ads could hurt conversion rates. (Today’s list includes a curated selection of apps, which means ads could dilute the value of those pages slightly.)
The other problem is about consistency.
Despite its privacy stance, the company’s website explains that advertisers can target ads to specific customer segments, as long as each segment contains at least 5,000 people to prevent personal targeting.
The ad system also uses account information, App Store data, transaction data, and a variety of contextual clues, such as device type, iOS version, and more. The system can, it seems, use personal data that individual developers have collected through customer relationships.
However, there are significant differences between third-party ads and Apple’s, not the least of which is that these ads can’t be about products or services available outside the store, and the ads are marked very clearly, at least so far.
Still, Apple’s decision to expand its ad placement in the App Store is a very easy target for some critics, who will argue that its recent moves to prevent things like app tracking show that the company uses privacy as a weapon against competitors. Apple will argue that its system is inherently private, while those used by others have already been abused to the detriment of all.
How to depersonalize Apple ads
You can disable personalized ads entirely on Apple platforms in your Account Settings in the App Store app. You must disable personalized recommendations, which is the part of the app that uses your app usage, downloads, purchases, and other activities to improve the recommendations you receive in the App Store and through other Apple services.
Earlier this year, Apple explained that around 78% of iOS users opt-out of these ads, noting that this had little impact on effectiveness conversion rates.
It says advertisers saw 62.1% of conversions from customers who opted for personalized ads compared to 62.5% who opted out.
Where to find more information about Apple Search Ads
Apple offers a comprehensive certification course on how to use Apple Search Ads, which registered developers can explore here.
At a time when there’s already controversy over Apple’s attempts to crack down on competing ad services by invoking privacy rules, I have little doubt that developers and regulators will pay close attention to this course.
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