By Craig Weinberg, VP of Mobile Strategy
Even if you don’t know all the details of the iOS 10’s new features and capabilities, you know the new release was a whopper. We’re going to call out the most significant updates and releases, let you know how we view their implications on both the product and growth sides of your app’s development, and give you some details into how they work.
The first and most important release, of course, is the launch of paid search ads in the iTunes store. This is the headliner in a suite of features that will change Apple’s app discovery and economics, with the others to note including new “featured content” real estate; dynamic targeting; a new revenue split model; and an expedited app review process. Almost all of the changes (which we’ll dive into below) will be in beta/planning stages this summer, with a full roll-out coming in the fall.
All of these represent a huge opportunity, both for Apple and brands looking to make it easier to get their apps discovered. iTunes is and has been the place most apps get discovered (primarily through search) According to Apple, 65% of all iOS app discovery takes place via in-store search. More broadly, our findings indicate that the number is more like 75% of all app discovery - across both stores and through off-store methods like organic/SEO/Google search.
iTunes remains the world’s dominant discovery platform even though the Play Store experience is far more sophisticated and user- (and brand-) friendly (and has been offering search ads for almost a year). Combine the clout of the world’s dominant app discovery platform with a better, faster, more agile platform (on both the front and back ends), and we’ll see that developers can more easily connect with target users. And Apple? They’ll retain iOS users and sell more hardware. It’s a win-win-win that’s been a long time coming.
Now for the deep dive into iOS 10’s most important releases: paid search ads; content updates; expedited reviews; and updated revenue splits. Let’s get started.
- One paid ad will appear at the top of every app search screen in the U.S. iTunes Store (iPhone, iPad, Universal Apps)
- Each ad will be labeled with a blue background and an “ad” icon (much like Apple’s now-dead mobile ad network, iAd labeled its creative.) And its content will be the same as the App’s Store Listing Page.
- Developers will get clicks, installs, keywords, and other deep data but will not receive user-level data.
- Expect the search and bidding functionality to be straightforward at first. Developers will bid on the one slot available at the top of search results.
- Bidding/cost will be on a “cost per tap” or CPA goal; only one ad per search will be shown.
- Adhering to its strict privacy standard, Apple will not show ads based on previous searches or data from other, connected apps; ads will also not be shown to users under the age of 13.
- There will be no minimums in these auctions. This is another tactic to democratize the app discovery process for developers of all shapes and sizes (not just the big players).
Image source: Tech CrunchPlanning ahead: availability, tracking, and dev. overheadAvailability
- The beta will begin this summer (timing TBD). While this is launching in the fall, it will still be in beta.
- This should be a great/viable channel for the right apps to get in front of new users. Brands will be able to: capture intent across both iTunes and the Play Store; capitalize on new/untapped audiences; better assess the dynamic of engaged and revenue-generating users vs. the never-ending quest for new users.
- This will give advertisers richer performance data from the root source: new installs/activations layered onto existing BI/audience insights.
- Search Ads Attribution API: Apple will offer a set of attribution and reporting APIs that will enable advertisers to create and manage campaigns and attribute/report performance.
- Reporting: Apple’s API and iTunes Connect will offer granular reporting down to the keyword and date/time stamp of the install.
- Demo, device, and location-based targeting + segmentation: Once a user has installed your app, that particular device/Device ID can be queried on the basis of whether or not that device was served search ads. This is yet another layer of business insight advertisers can funnel back into the overall audience pie.
- To enable Apple’s attribution, a few lines of code will need to be embedded into the app. This will be very similar to the process for integrating a 3rd-party attribution SDK like AppsFlyer, Adjust, Kochava, and TUNE.
App Store Content Updates
- Featured sections in iTunes will no longer recommend apps that the user has already installed. The user will only see new, not-yet-installed apps.
- 3D Touch-enabled sharing of apps gives us a new shortcut. A user can share/recommend an app to a friend via social networks simply by pressing on the app’s icon on the home screen.
- Say goodbye to the weekly, Thursday-only content updates. Apple will begin updating the iTunes store more frequently with new apps, new featured placements, and new content. This is a simple way of exposing more app users to new and interesting targeted apps.
Expedited App Reviews
Currently, Apple can take anywhere from 4-10 days to review and approve apps - otherwise known as the “black box process” - to make them live in the store. Obviously, this is a frustrating situation for any developer, especially ones with aggressive sprint/product update cycles. With iOS 10, Apple has dropped that time to as short as 1-2 days. Per MediaPost: “Apple reviews about 100,000 apps per week, but it has now figured out how to make those reviews go faster. It now has a pretty consistent rate of reviewing 50% of apps in 24 hours, and 90% in 48 hours.”
Updated Revenue Splits and Subscriptions
Apps no longer solely monetize through app sales. (Have you ever noticed how disproportionate free-to-paid app install ratios are?) Apple’s getting with the times by updating its revenue splits with developers as well as introducing a for-everyone subscription model that any developer can now tap into. App sales are old news; subscription models are the way forward.
TechCrunch breaks down the subscription updates well. Currently, app sales are split 70% for developers and 30% for Apple. In year one of an app’s subscription offering, it will remain 70/30. After year one, this will become 85/15. But subscriptions will be available to all app categories, not just the ones it had been previously limited to (streaming media, news, dating and cloud services). To qualify, subscription-based apps must offer content that is updated regularly or provide paid access to an ongoing service like a game or cloud storage. Developers will also be able to provide tiered/dynamic pricing per territory and new subscribers. Management for users will also become easier. They will be able access, upgrade, downgrade and change subscriptions.
Really, this release is about Apple modernizing the App Store for 2016 and keeping up with Google’s Play Store advances. It’s about cutting down on user fatigue by negative-targeting previously installed apps; refreshing app store content more often; and allowing developers to bring their products to market faster than ever. It’s about giving the user more control by making subscriptions universal (this alone could be a game-changer because it makes it easier for niche and smaller audience apps to derive revenue from their users). With this update, Apple’s providing a better consumer/user experience while providing developers with the commensurate level and depth of tools to do likewise.