Apple has begun monetizing on its own app store advertisements, rolling out its Apple Search Ads. Historically, app companies have had no choice but to turn to app install campaigns over Twitter, AdWords, and Facebook. Unfortunately for developers, the average cost per install (CPI) was continually rising each year across all campaigns, begging the question: is it even worth it?
Apple’s new search ad network is probably the best advertising network to descend upon app developers. With 90% of the time spent on mobile devices in applications, the move will present a strong revenue stream to Apple’s portfolio. Early reports have shown that the average conversion rate for an Apple search ad hovers around 50% while the average CPI is only $1.
Singular recently reported that their average CPI over Apple was $1.31, while app installs costed around $2.99 for display ads and $5.84 over social networks. On average, CPI’s are nearly 5x cheaper over Apple’s app store than over a social network.
How Apple Search Ads Work
Apple search ads work nearly the same as Google or Bing’s ad networks. Rather than targeting people based on interests like a social network, Apple allows app owners to bid on specific keywords that will drive impressions for ads during an app store search.
Apple search ads drive such a high conversion rate because these ads are being delivered to users very low in the funnel about to make a purchase. Consider that around 65-80% of app installs occur directly after a search in either the Android or Apple app store.
One unique feature of Apple’s search ads lie in Apple’s commitment to user experience. Ad relevance is paramount to ad bids in its app store network, which has been driving such high conversion rates and tap-through-rates.
Apple’s search network is built off of the bones of its previous idAD network. Bidding is based on the cost per tap model- exact same concept as cost per click. On average, the cost per tap for brands rests around 50 cents.
Apple’s bidding network functions the same way AdWords second auction operates. Essentially, advertisers would only bid as much as their nearest competitor would- up to their maximum bid. If your max bid is set higher you would bid one cent higher, though impressions will be driven to the ad with the highest relevance.
Bids will be more competitive across different verticals. Travel, gaming and entertainment are the most competitive markets in Apple’s ad network so far. With early reports confirming high conversion rates for app owners, Apple’s search ads also produce remarkable retargeting results.
Users create ad campaign through Apple’s ASO (app store optimization) and bid on app store keywords. Display ads are created by Apple and users have very limited choices for customization. Changing a campaign’s ad copy or ad name requires manually changing app settings to effectively change what ads Apple generates for users.
Users can create a new a campaign and begin segmenting each campaign based on the keywords he/she wish to target. Apple also offers advanced audience settings that allow users to segment their audience based on age, gender, and various other demographics. Begin running a campaign to collect data for about a month and begin experimenting with audience settings.
In 2017, 80% of apps across all industries churned within 90 days. The app market has been plagued by fickle retention rates since its inception- for every app, around 25% of users use the app only once.
Apple’s search ads offer sophisticated retargeting features that allow app developers to capture a huge segment of their audience who previously abandoned their app. Apple’ search ads allow targeting features to target new or existing users who have interacted with user’s apps under a given time frame. Users can set up campaigns based on four audience targeting settings:
- Users who never downloaded your app
- Your entire audience
- Users who previously downloaded the app
- Users downloaded other apps of yours
Search ad’s most exciting feature comes in the form of its keyword research tool. Search match develops the best keyword ideas for brands to bid on. Struggling campaigns will benefit from setting all existing keywords to negative keywords and allowing search match to create keyword ideas for those campaigns to scale.
Campaigns can be set up based on app categories. Bidding on relevant keywords might be a wiser strategy than simply increasing bids for high volume broad match keywords. Brands can also plug an API into the app store to buy their own keyword campaigns. With the average CPI rising for mobile app install campaigns, Apple’s revolutionary search ads come at a good time for app developers and smaller brands.