Paid search ads for Apple

By Charles Arthur

App Store results will now be headed by paid-for advertisements.
Developers such as New Zealander Rebeccah Cox will have to win an auction for their apps to get the most prominent spot after the changes.
Developers such as New Zealander Rebeccah Cox will have to win an auction for their apps to get the most prominent spot after the changes.

Apple is revamping its App Store, with a surprise move to introduce paid search ads for apps, as well as a new subscription model and faster reviews before approval.

The move to introduce a single paid ad at the top of search results in the App Store, initially in the US, could prove controversial with developers and users, who said they would prefer to see better "organic" search results.

Phil Schiller, Apple's senior vice-president of marketing, who in December took over responsibility for the App Stores across all four platforms - iOS, Mac, Apple Watch and Apple TV - said introducing paid search ads, which will be chosen on an auction process like Google's AdWords, would allow developers to focus their marketing budgets where people actually search for and download apps.

"There are hundreds of millions of searches on the App Store every week, and 65 per cent of app downloads are driven by search," he said. "It's a very valuable tool for users and developers. For developers, this will be very efficient marketing."

Developers' marketing budgets are presently spent on social media or online adverts, he argued, where they were less effective.

The move comes ahead of Apple's Worldwide Developer Conference in San Francisco next week, where it is expected to preview new software for the iPhone and Apple Watch, and possibly announce a new home device and updates to its MacBook Pro laptops.

Mr Schiller said with "so much" to announce next week, Apple wanted to tell developers about the App Store changes ahead of time.

The single ad appearing above the "organic" results will be marked as an advert and appear on a blue background. The chosen ad will be determined by a "relevance" metric.

"If you're searching for sports cars, you shouldn't get an ad for pretty ponies," said Mr Schiller. Ads can only be for other apps inside the store and developers will only have to pay if the ad is clicked on.

James Thomson, author of the iOS calculator app Pcalc and Mac OS app DragThing, said paid search "is a terrible idea for indie [independent] developers and will only benefit the big companies with deep pockets, rather than users. It will make the playing field even less level. Search should return the best and most relevant results, not the results with the biggest marketing budget."

Dave Verwer, an independent iOS developer, said: "Apple has a huge amount of data not only on the apps we buy, but on those that we use," and suggested search recommendations should be built on that.

However, Mr Schiller said having use-based recommendations would favour the larger, already-established apps, and wouldn't give new or small apps a chance to break through.

The other key change will see app developers earn more from subscriptions if they keep customers signed up for more than a year. After the first year of a subscription, Apple will halve its 30 per cent slice of the payment to 15 per cent, where it will stay. Developers will be able to change the subscription fee, which the subscriber will have to approve; if they do not, the subscription will lapse.

- Daily Telegraph UK

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