As part of the iOS 14.5 beta, it looks like Apple is testing new ways to monetize the App Store. Based on the existing App Store search ads program, users are now seeing a new sponsored ad slot that appears on the Search tab as a “suggested” item.
Previously, Apple only ran ads on the App Store when users searched for an app with advertisers bidding on keywords, similar to Google Search ads. This new type of ad is naturally more prominent, as it appears to the user before they search for anything.
Since the new sponsored ad slot is only appearing in the beta seeds of iOS 14.5 now, it is possible that Apple may not be ready to launch this ad slot officially when iOS 14.5 is released for everyone. It could simply be using the beta period to assess user engagement, average CTA statistics, and so on.
App Store search ads are a small but growing slice of Apple’s overall service revenue. App Store Search ads launched in 2016, with Apple looking for new areas of service revenue growth beyond the 15-30% cut that Apple receives in paid apps and in-app purchases.
The amount of sponsored advertising that customers see on iOS is already a controversial issue, since Apple already charges a good premium for the purchase of the hardware. Recent changes include the addition of promotional banners for Apple services like TV + and Fitness + in the Settings app. App Store Search ads are the most blatant form of this, of course, as Apple makes money directly from the impressions it generates for advertisers.
However, Apple’s in-house advertising schemes are even more prominent because of the upcoming application tracking transparency policies. Some groups argue that Apple is using ATT as a way to establish itself as a leading advertising provider on the iOS platform and sabotage all competing ad networks in the process. For example, a competing ad network where developers can promote their apps to a wider audience is Facebook. Last month, Facebook CEO Mark Zuckerberg said that Apple has an “incentive to interfere” in its business.
App Store Search ads allow app developers to direct iPhone and iPad users to relatively refined demographic data, with Apple using all the information associated with the user’s Apple ID. Targeting can be disabled by navigating to Settings -> Privacy -> Apple Ads -> Custom ads.
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