Apple Buys Google Ads for Subscription Apps
Hartley Charlton (tweet, Eric Seufert, Hacker News):
Apple allegedly buys Google ads for popular subscription-based third-party apps to bolster its collection of commission on in-app purchases, according to an investigation by Forbes.
Apple has purportedly been buying Google ads for subscription-based third-party apps, including HBO, Masterclass, Babbel, Tinder, Plenty of Fish, and Bumble, for at least two years. A marketer speaking to Forbes suggested that many of the brands Apple appears to be advertising for have been assertive about attempting to circumvent App Store policies. The ads are said to be placed without the developer’s consent and Google apparently refuses to remove them.
The ads do not disclose that they are paid for by Apple, but redirect to the App Store rather than subscription sign-up pages on the brand’s website.
My first reaction is that isn’t this sort of a win-win? All things being equal, I’d rather that Apple use some of the fees I’m paying to help sell more copies of my apps. That seems like something a good business partner would do. But, as far as I can tell, it’s not buying ads for indie apps. The situation for the big apps is a bit different:
If an app already has lots of brand awareness, it’s questionable whether Apple is actually bringing in new customers vs. “sniping” people who are already searching for the app but click the ad at the top rather than the organic result.
In this case, if the customer signs up within the app, Apple will get 15% for the entire duration of the subscription vs. zero if the customer signed up through the Web site. So, to the extent that the customer would have signed up anyway, this is a loss for the developer.
Apple’s bidding on ads increases the cost of ads that the developer is buying.
You could look at this as Apple using its arguably too-high fees against the developer that is paying them. They would rather pay lower fees than pay more for this “service.”
There’s some asymmetry here because most developers aren’t allowed to purchase Google ads that use Apple trademarks like “Mac” for better targeting, but yet Apple is placing ads using the names of the developers’ products, even though they don’t want it to.
Apple has now clarified that it has placed ads to promote products it distributes for five years now, and these ads are clearly marked as being from the App Store.
Apple indicated that this is no different from retailers running ads for the products they sell, and is a very standard business model. Apple is granted conventional legal rights to advertise in this way in the agreements it has with developers.
Apple says that the allegation that it is "secretly" or "quietly" purchasing ads for developers without their knowledge or consent is an overt mischaracterization. On the contrary, the company says that it regularly engages in conversation with developers about the ads it places and many developers express their appreciation for this support.
However, Apple doesn’t seem to have commented on the allegation that there’s no way to opt out. Apple would say that all these developers opted in as part of agreeing to be in the App Store, but they didn’t really have a choice in that aside from the sweet solution.
Previously:
7 Comments RSS · Twitter
No one has mentioned it yet, but this could be part of the deal between Apple and Google's Search Engine placement. Some promise of Ad dollar spend back on Google Ads or GCP. The two years also align with the last time Google renew the deal with Apple.
How is this even legal? Isn't it some kind of trademark abuse for Apple to basically impersonate another company, and redirect clicks that would go to their services to Apple's own service?
"These ads are clearly marked as being from the App Store" is so misleading. They're not "from the App Store" (which sounds like they might be from the company they are advertising, but linking to the App Store). They're FROM APPLE.
[…] Reference: Apple Defends Its Ads for Third-Party Apps, Says It Regularly Communicates With Developers and Has Been Running Them for Five Years, Apple Buys Google Ads for Subscription Apps […]
@Plume To be in the App Store, you have to sign the “Paid Applications Agreement,” which allows Apple to use your trademark. I agree that “from the App Store” is misleading.
"The best minds of my generation are thinking about how to make people click ads."
--Jeff Hammerbache
"To be in the App Store, you have to sign the “Paid Applications Agreement,” which allows Apple to use your trademark"
Thanks, didn't know that. That makes sense.
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