Search Ads
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If App Store search is effective, this will swing ad budgets away. FB still has all the demographic and audience info, but arguably none of that is important bc all you want to do in those types of ads is attract users who spent. Apple is at the top of the chain, they can do this better than FB bc they have reliable transaction data and FB has to rely on properly instrumented SDKs, then use machine learning to figure out who "might" be a spender, then have the marketing person optimize those ads. Wouldn't you rather just say, target anyone who has previously made a purchase in a game and be done with it?
Another note. I once created a niche utility app that I eventually had to takedown because as an indie dev it was difficult to rise above the ranks, even if the apps above mine were super shitty. I'm going to resurrect that app tonight bc for the first time this might be an effective form of user acquisition. FB ads were terrible bc it is not intent-based and Adwords were terrible because people don't search Google for apps then pull out their phones to download apps (or search in Safari then switch to App Store).
Whenever I use the App store, I'm on a mission. But it's also a mission to get free stuff, so maybe I'm not even part of the equation.
I don't think I've casually browsed around the app store since I got my first iPhone (first smartphone), around 2009 or 10.
How many times do you visit the App Store without already had an intent to download a specific app or a specific app category? Compare that to how often you visit the FB timeline. The intrusiveness of FB ads hitting your brain when you had no internal motivation for look for another app is why FB ads will continue to be powerful.
i.e., in iOS9, when I searched for "spotify" in Spotlight, I'd get App Store results.
First off, it's bad for the end user since app quality has nothing to do with the amount spent on advertising. It is also bad for indie developers since they won't be able to compete with big businesses. Most likely, the indie made app you love will be harder to find since other apps will be shown instead.
This sucks and is a totally greedy move from one of the largest corporations in the world.
You can talk about the problems with walled gardens all day and I'd agree with the majority of what you're saying, but I gotta be honest, when you're inside the walled garden it is pretty nice that they keep the riff-raff out, in this case the riff raff being the low budget (and frequently IP infringing) crapware games.
Craig Federighi and Phil Schiller address these obvious concerns in this candid post-WWDC talk:
...how do you do it in a way that gives advantages to small and indie developers, because it's easy to imagine a system that didn't do that.
First of all, there's no minimum bid. So we don't set a bar, if you have a very small amount of money, you can just do what you can with a small amount of money.
The fact that we're going to work really hard to try to make relevance the top priority, over bid, for why something gets shown. That the users are the ultimate deciders of what gets shown, based on their clicks, they're a big input to what is relevant to the search result.
The fact that we're going to work hard to try to police and improve the whole metadata system if we find, as it easily could be abused to hurt [small] developers.
The fact that — and this has been a hotly-debated thing — the fact that you can do conquesting. You can use someone else's brand in your ad words that you want to use. As we thought about it, that is more likely to benefit the small developer than the big developer. Because the big developer isn't going to pick on a lot of small developer terms, but a small developer can try to latch on to a big developer's name. If I want to search for Angry Birds and your game, you can. Right? And so we think that that can help them.
The fact that there's no exclusivity. So a large developer cannot say, "And I want to be the top bid, and I'm going to spend everything I can to buy out this term." There will be no exclusivity, there's going to be a rotation there, and as that rotation appears, the relevance will help drive it further.
We're trying everything we can, and I think one of the best things is, right now, once we're in beta throughout the summer, the downloads the users get from the ads are real downloads to benefit the developer, but we're not charging [for ads] during the beta time. So there's a chance for everybody to get in and try it out, help us learn from it, and drive real downloads and real business without any marketing spend.
[1] http://www.imore.com/our-full-transcript-talk-show-wwdc-2016...
Phil Schiller:
So, the two sort of priorties we set on the team as they were working on it was, if we're going to do this, we have to do it in a way that, number one, protects user privacy. There are many ways that companies do it where they're not protecting privacy and we need to understand that. And secondly, how do you do it in a way that gives advantages to small and indie developers, because it's easy to imagine a system that didn't do that.
And so, we set out to think of all the things we could do to make that possible. And there's a long list of things. And I won't go through all of them to bore you all, but there are many things.
Things like:
- First of all, there's no minimum bid. So we don't set a bar, if you have a very small amount of money, you can just do what you can with a small amount of money.
- The fact that we're going to work really hard to try to make relevance the top priority, over bid, for why something gets shown. That the users are the ultimate deciders of what gets shown, based on their clicks, they're a big input to what is relevant to the search result.
- The fact that we're going to work hard to try to police and improve the whole metadata system if we find, as it easily could be abused to hurt [small] developers.
- The fact that — and this has been a hotly-debated thing — the fact that you can do conquesting. You can use someone else's brand in your ad words that you want to use. As we thought about it, that is more likely to benefit the small developer than the big developer. Because the big developer isn't going to pick on a lot of small developer terms, but a small developer can try to latch on to a big developer's name. If I want to search for Angry Birds and your game, you can. Right? And so we think that that can help them.
- The fact that there's no exclusivity. So a large developer cannot say, "And I want to be the top bid, and I'm going to spend everything I can to buy out this term." There will be no exclusivity, there's going to be a rotation there, and as that rotation appears, the relevance will help drive it further.
We're trying everything we can, and I think one of the best things is, right now, once we're in beta throughout the summer, the downloads the users get from the ads are real downloads to benefit the developer, but we're not charging [for ads] during the beta time. So there's a chance for everybody to get in and try it out, help us learn from it, and drive real downloads and real business without any marketing spend.
So we're trying to think of things we can do, and we'll think of more. We'll take feedback and see what's happening, and where it works and doesn't work, and where it feels like they're getting stomped on, and we'll try to do all that we can to make it better.
Is that really true though? If I have a bad app that nobody wants and I'm not planning on improving, spending money advertising it would be a waste. The only people who spend money advertising are those that think they can convert those impressions to money, usually by providing value to customers.
If advertising was their main revenue stream, I'd understand it. But it's not, and it's hard to ever imagine it being so. Apple have already pulled away from mobile advertising, so this looks more like a revenue-grab than a long-term strategic move.
They already own the app distribution on iOS completely and is already making huge amounts of money (I would guess) on that 30% cut. Do they really need to make the extra money that comes of this?
Sure, it will make their revenue go up even more but at the expense of users and smaller developers. That is what I believe, but if that really is what is going to happen I guess we will find out.
It would be very interesting if they get into the advertising business. Harvesting data about my usage it and using that data to charge more for ads that are well targeted.
It would mean that in addition to apple selling a product at a premium, the users would also become a product.
Combine this with things like the disappearing head phone jack, and apple is becoming actively hostile towards its users.
Edit: how do i italics
*like this*
(b) The situations you're describing hasn't really changed since Facebook added ads, so they could've had that "realization" much earlier.
(c) Apple is positioning itself as a privacy-focused company with (for example) their lawsuit regarding iPhone unlocking and their implementation of differential privacy for their machine learning algorithms. It'd be stupid to give that up and risk a triple-digit-billion-business (iPhone) for what's bound to be a small fraction of that (ads in the App Store).
You don't have to outrun the bear, just your friend.
Apple does harvest your data, but they don't sell it. You're not a product.
The headphone jack is an entirely different situation. It was a necessary move on Apple's part in order to push industry standards towards wireless. I'm sure in a few years, we're all going to laugh about all the wires and cables we used to have everywhere. I wouldn't be surprised if eventually Apple got rid of all ports on all their devices.
To be fair, the SD card has been abandoned by the Google Nexus line as well. It caused a lot more problems than solved. Now that storage is relatively cheap, more manufacturers are removing it.
> it's basically impossible for an unknown developer to get noticed
They could improve the search algorithm to solve this. Perhaps redesign the app store UI to better accommodate new apps. Or they could stagnate for years and then solve the problem by charging developers more.
I'm not a hater though.
Developers (including myself) are already paying these fees to Google, Facebook and Bing in the form of app install ads. We'll likely get more more bang for the buck directly on the App Store though, so IMO it's a win for developers.
How? If there are 1000s of new apps coming out per day, how do you better accommodate all of them?
Do you have any ideas on how to do it?
Lol This is what will happen in reality an unknown developer starts trending with the next Meerkat, only for a Twitter to push 10M$ worth of Ads for its Periscope (Development cost 5M$ ~ half the marketing budget) on App Store and bury the "unknown developer"
Think about it this way, All app installs must go through the app store, and by introducing ads at the second last stage, the entire "word of mouth" funnel is now under threat. So unless the the user has a "direct deep link" (E.g. via the app website, or ahem FB Ads) to the app store page, That user is much more likely to be lost to a competitor.
To expand my example: Earlier someone would have their friend mention "Meerkat", leading them to search for Meerkat and they would be guaranteed to find Meerkat un-distracted by any other well funded competitor. Now Apple has essentially exploited its "Walled garden" monopoly on installs, by introducing Ads in the second last steps used in 65% of cases.
If you think this is a "good thing" for developers you are gravely mistaken and iOS devs are being taken for a ride.
I feel like this is kinda missing the point. The solution for app discovery (not that I really think there is one) isn't "sell ads". Organic discovery is always going to be far superior.
How does the unknown developer go about buying ads with unknown revenue?
This seems to me like it will give an advantage to the bigger players, and that Apple will reap most of the benefits.
If the service is free, you could be the product (on not, like Linux), but you could be the product even if you paid.
Many physical newspapers cost money and had ads (even the reputable newspapers such as the NYT), and likely sold your information (whatever they had, that is) to the highest bidder.
If they had a way to track you, they would in a heartbeat.
Hats off to Apple. First, they charge developers to even develop for their platform (though this has become free off late). They only allow developing on their Macs. Then they take 30% cut of apps and also in-app purchases. And now they want more money to promote stuff in their store. I don't know what to say. I am sure this will be a raging success as well :/
Maybe I'm missing something, but it seems like Apple is only doing what every other search system with embedded ads at the top does.
try searching for something like "car insurance" on google with adblock turned off - the majority of the visible page area will be used by some sort of ad unit, and the native results are pretty useless.
I think it could, to a certain extent. If someone stops supporting an app, I think there's a decent chance they wouldn't both paying money to promote it. At least for the kind of throw-away crap apps that are out there.
In supermarkets, they are. To most consumers, one brand of milk might as well be another brand--even if the tastes is different, it's slight enough to be negligible. So just shelving everything as 'milk' is good enough for the supermarket to handle is distribution duty. Now if one particular brand wants to do better than its competitor, it can pay for placement closer to the checkout section, or pay for a big promotional area for it.
The same might be true with apps. Yes apps have differences, but its not really clear that such differences are enough that there is clearly one app better suited for a purpose than another. Nor is it clear that you can both (a) divine the suitability of any app and (b) match that up with a consumer with any degree of accuracy versus alternatives.
If the above were true, central planning via the app store would be great. Since it's not... well our best known solution is capitalist market action which opening up the store to advertisement allows.
Actually, the point of the app store was distribution. That's what the 30% cut was for IIRC. And that's how they sold it, by comparing it to the 50% and more cut that older, traditional channels took at the time of introduction. I don't think they ever even thought about discovery, which would explain why the app store has become such a mess in the first place!
> And now they want to charge me for promoting my app in their store. This should just be a built-in part of the App Store story for the customers. This is why Apple customers pay a premium. Instead Apple sees an opportunity here to make even more money off me / the app authors?
I don't think making money is the main consideration for Apple here. Advertising can also play a useful role as a market mechanism (keyword: "price discovery"). For example, if you spend money to promote your app, you signal confidence in its value proposition. Also, you might be more selective in your targeting. Etc. So the money itself is almost incidental, what we really want here is the information aggregation and surfacing function of a competitive market, the most efficient matching of offers (app makers) and bidders (app users) across an extremely heterogeneous collection of agents.
But it needs to be set up correctly (this is what all the mechanism design literature is all about). Hopefully it is, but I suppose we'll just have to wait and see.
"The App Store makes it simple for users around the world to discover, download and enjoy your apps. "
Discovery is very much part of the deal.
You are crazy if you think this is a way for Apple to do anything other than capture some of the existing market of app ads, which has been incredibly lucrative for Facebook. They have so many ways to get more information about how useful an app is likely to be for you that they don't use, they don't need another signal.
Maybe not anymore but the app store was launched in 2008. If you look at the percentage a writer or a band makes from a physical book resp. studio album, 50% actually looks very optimistic. Don't forget, there were multiple layers involved, including shipping, wholesalers, retailers, etc. and everybody wanted a cut. There's a reason desktop software to this day has a much higher price anchor than mobile!
My point was that "distributors" or retailers never took 50% as the original post suggested.
If you believe that the reason desktop software has a higher anchor price point than mobile is the multiple layers, please explain why the price point on the Steam store is so much higher than the app store.
Your Steam analogy is flawed due to selection bias - Steam is about games, and games are more similar to movies than apps. People want entertaining content (and a good amount) for that initial price.
Does Steam allow for freemium? What about ad-driven games?
The mobile carriers often charged upwards of that rate to game publishers.
Nobody was paying Apple 30% because that was cheaper than distributing yourself. They paid 30% because without paying that their app wouldn't get discovered, by design.
Now Apple has decided 30% only buys you the privilege of being able to pay more to be discovered.
Search ads give companies a legitimate way to promote apps within the app store, outside of editorial or bad tactics to game search results (title keyword stuffing, keyword highjacking etc).
The App Store is where the customers are, so it makes sense to allow advertising here. Otherwise the alternative Google or Facebook where you're changes of conversion are such a great deal less because you're so far removed from the channel.
It's like the difference between being offered fries at the fast food counter compared to a banner ad. It's clear it's going to be better for all involved to be offered something in the better context.
iOS customers don't have the choice but to go get their apps on the appstore. Saying that is redundant.
How has it become free? Honest question, as I'm not sure what you're referring to.
Still need a paid developer account in order to publish to the App Store.
This includes historical information about your transactions in the App Store, including apps you have downloaded and in-app purchases you've made."
Yuck.
> Advertisers have the ability to select user segments based on this information when setting up their campaigns to guide the delivery of their ads. However, no user segment can be smaller than 5,000 people. No individual user data may be exported from Search Ads, ensuring that only aggregate campaign delivery information is available and no individual user data is ever exposed to advertisers.
So individual developers don't have access to this information.
It is also to get some of the Ads revenue from Google and mainly facebook, where Apps install is a huge deal.
The idea has some merit: you can't spam the search engine with completely irrelevant ads, because users will click them and thus charge the advertiser, but they'll quickly leave the site because it isn't relevant to their search.
Modern pay-per-click (PPC) does yield management and ranks ads based on the click-through-rate (CTR) multiplied by the PPC. So if you create irrelevant ads that no one ever clicks on, they'll stop being shown in favor of more relevant ads with a higher CTR.
https://www.google.com/search?q=app+store+apple+blank+screen (Notice how the results spawn from 2012 to today)
App discovery feels utterly broken
I think if Apple prices correctly it has the potential to reduce in-app ads considerably at the same time increasing revenue for Apple because most ads in apps are to download other apps and if relevant apps are served up via Search Ads it could be a better business model than iAds.
"The iAd App Network will no longer be available starting July 1, 2016"
It's a credit card, you're not liable for fraudulent charges and you're saving it with the largest company in the world (market cap).