How Apple Search Ads is Challenging Facebook

How Apple Search Ads is Challenging Facebook

Apple just announced that coming this fall Search Ads would be introduced into the iOS App store eco system, allowing App publishers to target people who are actively searching to install apps by keywords.

Mobile App Installs on Facebook now account for a large portion of total mobile ad spend on the platform. This is a huge part of Facebook’s ad revenue, as its mobile spend has been a key driver of growth.

According to the New York Times, Mobile ads on Facebook made up “80 percent of the company’s total ad business in the fourth quarter of 2015, compared with 23 percent in the same quarter of 2012.”

Now, competing Ad formats and platforms are looking to cash in on the spend. With mobile app installs representing such a large percent of Facebook’s advertising revenues, it’s going to be interesting to see how the company will respond to the new threats.

 

Apple’s Search Ads

Remaining near static since its inception, the App store is now making three big changes:

  • allowing any app to take advantage of subscriptions
  • faster review times
  • the introduction of Search Ads to the store

Until now, ad unit options have been limited for App publishers looking to buy mobile app installs. Search Ads open format will change this.

As more people are searching the app store with intent to download, this new ad format will grow in importance. Comscore reported that 57% of smartphone users ages 18 to 55+ rely on the App Store for app discovery, and Apple reported that over 65 percent of all iOS app downloads come directly from search on the App Store.

 

Screen Shot 2016-06-29 at 12.11.21 PMSearch Ads Format

The new ads will work similar to Google’s search ads, in that apps can now advertise app installs above relevant App Store search results. Paid results will be placed at the top of App Store search results with a badge that indicates the result is an “ad”, giving users the ability to download the app (See Picture).

Only one ad unit will be presented to every search query, with the paid placements showing up with a light blue background when shown as a result.

It’s also important to note, no ads will be shown to users who are aged 13 or under, or accounts that are registered as “Managed Apple IDs”.

According to Apple an ad will only be shown if it is relevant to the user’s search query. In addition, the ads won’t be shown to users who already have the app installed on their device. This will drive massive efficiency in ad awareness, because only new potential users will be seeing an app’s branding.

Targeting abilities include age, gender, device type, and device location. Ads can be directed to potential new customers, an app’s existing user base, or users from other app’s publishers. However, the company won’t be tracking users based on search queries, or any other data from Apple’s other apps.

The combination of these targeting capabilities will drive targeted audience reach, resonance, and reaction by giving advertisers the ability to place their app in front of relevant consumer segments, with implications in hyper local targeting by city.

These are some of the same audience targeting options that make Facebook Ad units so appealing for advertisers and app publishers.

With all of these new targeting features, Apple claims search ads will set a “new standard for delivering relevant ads while respecting user privacy by adhering to Apple’s privacy standards.”

 

Search Ads Setup

Apple seems to have set up the ad buying process to be as automated as possible. Their focus on streamlining the ordering experience will save advertisers time and lower the barriers of entry in ad configuration complexity.

To create an ad group, advertisers simply need to follow four steps:

  • indicate the app they want to promote
  • select an App Store storefront
  • indicate the desired device they want the ad to show up on
  • set pricing targets

Advertisers can even schedule ads to appear at specific times of the day or days of the week. Apple will automatically create and place the ad units using the title and images provided, and using the description from the store as ad copy.

For keyword configuration, Apple has introduced a feature called “Search Match” where they automatically create and match ads to users who are searching for similar apps, saving advertisers time on keyword selection.

However, Search Ads will also feature areas for specific keyword selection, and advanced audience targeting. Advertisers will have the ability to choose their own specific keywords, or select from a list that Apple suggests based around endpoints from the promoted apps store data and its genre.

 

Ad Costs and Efficiency

Apple’s Search Ads are based on a cost per action configuration, where advertisers pay when users tap on the ad and when they install the app. Advertisers can pay as little or as much as they want with no campaign duration limits, minimum spends, or long term contracts.

The marketplace is setup on a bidding system that allows advertisers to bid on the maximum amount they want to pay for a customer to tap on their ad. Advertisers who have a specific target cost per install number can track the conversion rate from Search Ad taps to app installs, and then set a ceiling on their per tap bid to drive further efficiency in their search spend.

This has secondary implications for brand awareness, because ad units are still shown to a relevant consumer base even though they may not interact with the ad, driving efficiency and arbitrage in their paid search spends.

It is also important to note that Apple will show you how many impressions an ad obtained throughout the duration of the ad campaign, giving advertisers the ability to tack metrics.

In addition, advertisers can track downloads driven by Search Ads and the specific bidded keyword that attributed to the install. This will make campaigns more refined over time and will ensure advertisers only spend money on keywords that lead to both taps and installs, again driving even more efficiency in mobile spends that only Apple can offer.

 

Takeaways

Search Ads will become an extremely powerful tool in mobile advertisers playbook and will grow even more important over time, as increasing numbers of people are searching the app store with intent to download.

Search Ads mark the start of an era where iOS Publishers can target relevant users at the moment of app discovery, driving new found efficiencies in customer acquisition, ad unit campaign configuration, and reporting.  

Publishers who take advantage of the new ads can capitalize on low demand on popular keywords driven by a digital advertiser adoption curve that may take three to six months to really get going once Search Ads go mainstream.

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