Paid Search Advertising Reportedly Coming To The App Store

15 April 2016

Bloomberg:

Apple Inc. has constructed a secret team to explore changes to the App Store, including a new strategy for charging developers to have their apps more prominently displayed, according to people familiar with the plans.

Among the ideas being pursued, Apple is considering paid search, a Google-like model in which companies would pay to have their app shown at the top of search results based on what a customer is seeking. For instance, a game developer could pay to have its program shown when somebody looks for “football game,” “word puzzle” or “blackjack.”

Adding paid search to the App Store could be extremely damaging to the (already fragile) ecosystem. If you asked people to name the main problems with the App Store today, discoverability of good apps would rank near the top of the list.

I think any change to the App Store search algorithms that adds variables into the mix that can be distorted by third-party company marketing budgets is undesirable. By its very nature, paid search skews results towards those institutions with the biggest wallets. It does not seem like that it would improve discoverability for me, an indie developer who cannot afford to pay for these expenses.

Paid search has a spiralling factor too, reinforcing the position of the incumbents. The theory goes that those apps already top of the App Store grossing charts (think crappy virtual currency games) will have the most money to spend on paid App Store advertising, strengthening their dominance further. The small guys selling apps for a few dollars a piece don’t stand a chance — there’s no money available for more marketing.

Google is considered to be the best search engine in the world and their results are littered with paid ad placements, so commercialising search does not spell doom by default. I will wait to see Apple’s implementation before getting seriously upset. That being said, any store algorithm that values more highly apps that have paid the most money to be listed rather than factors around application quality does not excite me as a user or as a developer.

Perhaps, if paid search advertising budgets were somehow linked to the price of the app, it could be feasible. If Apple guaranteed to only charge developers if the advertising resulted in a sale, small apps could at least join in. Developers could simply apportion a fixed percentage of their app revenue towards the App Store marketing budget.

However, I don’t think much would change for the better if something like that was introduced. A new equilibrium would quickly arise where everyone would be forced to pay for Apple’s paid search listings to stay competitive with the wider market of apps, leaving the problem of ranking quality apps higher than the rest unchanged.

The same situation would arise where all developers are competing for the same eyeballs as before, except they would be paying a bit more for the privilege with Apple’s revenues receiving a tidy boost from developers being compelled to pay for premium placement in App Store search.