Apple is joining in paid search business next week. According to a report on The Verge, the company will release its paid-search ads for the App store. The company is going to introduce a new app-subscription revenue sharing model.
The possibility of Apple store SEM joining in search ads was raised in the Bloomberg report of April. Though actual product launch will come later developers are being invited to join beta quickly. Apple has confirmed it in the official site:
“Search Ads is an efficient and easy way for you to promote your app within the U.S. App Store search results, helping people discover or reengage with your app at the very moment they are searching for apps like yours. Designed to give users safe search experience, Search Ads sets a new standard for delivering relevant ads while respecting user privacy”.
Paid search ads on Apps will be useful to find suitable apps for iOS developers. Though, there is no confirmation on bidding or ranking but can be expected next week. If Apple does that, it will be just little more than a year after Google introduced search ads for Google Play store.
Further, Apple is expected to attract app developers with its subscription model to generate revenue by offering larger profit from the second year. But, Apple will take 30 per cent revenue in the first year, which will drop to 15% from the second year. It means developers can pocket 85% of the revenues after the first year according to an agreement.
In addition to it, Apple will expand app categories that sell subscriptions. Earlier, only a few were based on subscriptions and new options will be launched at WWDC.
The last quarter service revenue of Apple is $6 billion including the App store revenue. But, the overall revenue for the company was $20 billion from the App Store.
Studies in Google Play Store has revealed, search and search ads have helped in a substantial increase of app discovery by the consumers. TUNE reported in 2014 than 50% of users found apps with the help of App Store search and well ahead of family or friends. Till now, Facebook has pocketed millions of dollars from app-download advertising.
It is hard to analyze how much money Apple will make from App Store SEM and probably a lot.