“Apple looks forward to introduce an AdWords-like paid search model for iOS App Store”

Apple is gearing up to dive into paid-search business. According to a report in the Verge, at the upcoming WWDC, Apple is going to unveil paid-search ads for the App store. It also has plans to introduce a new app-subscription revenue sharing model as well.

App Store SEM was initially hinted in a report in April, this year. Here’s an excerpt from Apple 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 a safe search experience, Search Ads sets a new standard for delivering relevant ads while respecting user privacy.” – Apple

What change will this update bring

One of the big problems that iOS developers face after launching an App is to get it discovered. This paid search will definitely help solve this App-discovery problem. However, there isn’t any update on bidding or ranking so far, but the hope is that they will be further explained in the coming time. This update from Apple came after Google introduced paid search ads for their Playstore a few months ago.

Moreover, Apple will also offer the developers a chance to receive recurring revenue via subscription model, by giving them a larger share after the first year sales. In figures, Apple takes 30% revenue cut in the first year and it plans to drop it to 15% after the first year and offering 85% of the money to the developers.

“New App categories will be introduced to sell subscriptions.”

Increase in Profit

In the last quarter, Apple had around $6 billion in Services revenue that includes App Store revenues. Last year Apple saw $20 billion in App Store revenue, introducing this new strategy will equally benefit both developers and Apple.

Recent research has shown that search ads (Google Play) and Facebook’s App-download advertising has garnered millions of Dollars and helped developers boost their app visibility.

It is hard to say how much profit Apple would generate from App Store SEM, but if a company like Apple has considered this step, then they have understood the market trend and saw what’s going to help them in the future.

All-in-all, this update from Apple is surely going to be a blessing for developers!