Keyword Sponsored App Search: A Potential Win-Win Situation

Apple has recently announced that they have constructed a team of roughly 100 engineers to find a way to improve the cluttered App Store. Bloomberg News reports that the team was created in response to backlash from developers over how the App Store is currently set up. Developers have been arguing that it is impossible for new apps to be discovered by users due to the ever-increasing number of apps and the monopoly over the App Store that certain mega developers have.

In an effort to solve these complaints, the team is leaning towards a sponsored search feature for the App Store. As we have learned in class, keyword based ads, as popularized by Google, are historically the most successful for both the client and the proprietor.

A recent article by  Japheth Dillman on Venture Beat explains how almost everyone will come out on top if Apple is successfully builds a keyword sponsored search system for the App Store. As previously mentioned, small time app developers are complaining to Apple that their apps have been swallowed up in the sea of 1.5 million apps. Although the App Store does currently have an Explore feature, it is difficult to navigate and is dominated by the same apps month after month. Outside of the App Store, it is even more difficult for small developers to have their apps noticed. The problem is they have to compete with powerhouse app developers such as Supercell (developer of Clash of Clans) and King (developer of Candy Crush Saga), who have enough revenue to spend over half a billion dollars annually on marketing.

So how will a keyword based paid search feature help the little guys? First off, the visibility of smaller apps will increase significantly, as they will be moved to the top of the search queue. Each keyword can be thought of as a different type of fishing bait. Keyword sponsored search gives the smaller fish the ability to take the first bite at the bait of their choosing before the big fish come in and eat the whole thing. Having the ability to be at the top of the search queue can immediately leads to more downloads of an app, as 67% of mobile users reported that the last app they download was found through an App Store search.

As with any new form of advertising, there are worries that smaller apps might be priced out of the App Store. Dillman explains that for Apple’s sponsored search to be successful, it cannot be just be based on Cost per Click (CPC). If Apple’s algorithm was simply CPC, the big developers could outbid the small developers for every buzzword. Instead, he believes the only way Apple will level the playing field is to create a system similar to Google Search that is a hybrid of CPC and Click Through Rate (CTC).

Although no one knows what Apple is planning for their keyword sponsored search system, Apple will no matter what have a new source of revenue that the company desperately needs. It will be interesting to see if they level the playing field of chase the money.

 

“Apple Pursues New Search Features for a Crowded App Store” by Adam Satariano, Bloomberg News

“Will Apple’s paid search product level the playing field for game publishers?” by Japheth Dillman, Venture Beat

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