Apple is Quietly Buying Search Ads for Many App Store Applications

When you are looking for an app on the Apple App Store, advertisements for apps might suddenly appear at the top of your search results. Despite being a paid placement, these ads are placed in between free and premium apps. This is done by Apple itself.

Apple has been purchasing ad space on many different websites over the past couple of years, including Google’s Adwords service, which displays ads to users whenever they conduct searches via Google or any affiliated site that uses the company’s advertising solution. The same thing happens with Facebook Ads, who owns Atlas Solutions – formerly known as Atlas Advertiser Suite – an online marketing platform used for targeted advertisement purposes.

“Atlas provides marketers with unique targeting capabilities so they can reach their audiences with the right message, at the moment they’re most receptive,” is written on Atlas’ official website.

We have not been able to find any proper documentation from Apple about this new service, but if you check the developer guidelines for iOS and Mac Apps, it reads as follows: “For Search Ads in the App Store, a minimum purchase may apply.” We also found similar text on Apple’s website for developers. There is nothing else publicly known about this process at this point.

However, 9to5Mac has talked to one source who claims that Apple purchases search ads mostly based on search terms used by iOS users which are related to specific apps or game titles. This includes names of apps themselves (e.g., Words with Friends) and generic terms (e.g., “games”). Apple purchases search ads for both free and paid apps, and the purchase is made based on the number of times a keyword was used in iOS searches over a 30-day period.

What does this mean? Well, it looks like Apple wants to bring more traffic into the App Store, promoting specific applications that users can download. The company recently revealed that there are 1.2 million apps available for download on its platform – not all of them show up in search results organically – so we could see this as an attempt by Apple to keep developers happy and paying customers coming back to download new applications instead of visiting other platforms such as Google Play or Amazon’s Appstore.

Although Apple’s decision to purchase search ads through Google and Facebook is most likely a good one, the company is also helping developers who use an in-app advertising platform such as TapJoy. The latter offers developers ways of monetizing their apps without having to add annoying banner ads all over the user interface, but instead by offering virtual goods or coins that users can buy with real money.

We tried finding ad spaces on our own directly from within iTunes (both Mac and iOS versions), and were not able to locate any. However, we did come across an ad for Geometry Wars 3: Dimensions featuring an image of the game and its official description underneath. After clicking into it we were navigated away from the App Store onto Activision’s website, which then prompted us to download the game. Not exactly what we were expecting, but this could be Apple squeezing out revenue from companies to promote their products and apps on iOS devices.

Companies like TapJoy make money by charging developers every time a user starts playing with an item or upgrades to a paid version of an app (in-app billing). They also pay for impressions you receive inside applications, meaning that if you are not interested in their services it is possible that you’re never going to see them anywhere aside from the App Store. This means that users’ private data is not collected at all here – it’s about getting impressions for developers who want more customers. However, some advertising networks will still track your activity even if you’re not interested in what they have to offer.

For instance, Flurry offers mobile analytics and advertising services for hundreds of thousands of apps across iOS, Android or Windows Phone. It’s free to start using the company’s solutions but if you want a more personal approach – one that is much more intrusive – you can sign up for one of their paid plans. However, it looks like Apple will be focusing completely on its own service as we found no sign of anything else except Geometry Wars 3: Dimensions after visiting the “iAds destination” as mentioned above.

Apple has been trying to stay out of advertising as much as possible ever since Jobs returned to take charge in 1997. When he came back he told everyone that “Apple is insanely great” and that the company “doesn’t want your advertising dollars”. On October 2nd 1997, Jobs sent out a letter to all of Apple’s employees to explain why he was resigning as CEO. In it he said:

“The products are superb, but the company is operating like a startup.”

In other words, Apple had been making plenty of money from product sales but wasn’t doing much with its cash pile at the time beyond purchasing components which were then converted into computers. It turned into a big problem when Microsoft began releasing new versions of Windows every few years – instead of updating OS X on a regular basis – since these moves would not only increase market share for Microsoft, but also provide more revenue from their existing customers.

Apple was also making a decent amount of money from licensing deals with Microsoft and other companies who were willing to pay for the rights in order to bundle Apple’s software with their devices running Windows. A part of this revenue would then find its way into Apple’s bank account, but Jobs wasn’t interested in that either which was a big reason why his second stint didn’t end well.

As you can imagine, advertising is not something that Tim Cook or Jony Ive want to be associated with under any circumstances whatsoever due to Jobs’ previous negative experience with it. However, seeing as Google and Facebook are currently dominating mobile ads on both iOS and Android, maybe Apple will have no choice but to get involved somehow if it wants to generate some extra revenue from iAd? We will have to wait and see…

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