Tag Archives: iads

Paid search and App Store profit

Reacting to a Bloomberg article about Apple adding paid search results in the App Store, John Gruber writes:

This sounds like a terrible idea. The one and only thing Apple should do with App Store search is make it more accurate. They don’t need to squeeze any more money from it. More accurate, reliable App Store search would help users and help good developers.

The Bloomberg article almost makes it sound like there’s a 100-person team working on paid search. I doubt that’s true. More likely, there’s a team working on several improvements to the App Store, including better search.

Daniel Jalkut is also very skeptical:

It’s hard to see how paid placement would consistently benefit either Apple or its direct customers. It’s unlikely that paid listings would be used to highlight apps that are in line with Apple’s other goals for the store.

He rightly points out that making money from the App Store is Apple’s secondary goal. It’s more important to have an ecosystem of apps that make the iPhone itself indispensable. As I argued in a blog post in 2011 about free apps and distribution, I don’t think the App Store should be a source of significant profit for Apple at all.

And if we’re keeping score with old posts where I write not what Apple should do but what I wish they’d do, see “I hope iAd fails” from 2010. iAd is shutting down in June.

I just can’t believe Apple would prioritize paid search over all the other App Store feature requests that developers have. So I prefer to ignore the paid search rumor and instead take away from this article just the good news: Apple has a new team focused on improving the App Store.

iAd setback

I was confused at first by Apple’s iAd announcement to developers. I read it as iAd completely shutting down, but apparently it’s just the “app network”. Still, it’s a welcome setback for those of us who were never fans of iAd.

John Gruber doesn’t think Apple’s heart is really in it:

“When iAd launched, its biggest advocate among Apple’s leadership was Scott Forstall. In some ways I’m surprised it took this long for them to pull the plug. After Forstall, I don’t think anyone’s heart was in this.”

I agree. Back in 2010, I said that I hope iAd fails. It seemed at odds with Apple’s focus as a product company, not to mention hypocritical for a company with ad-blocking APIs. Apple and third-party developers should be united in encouraging users to pay for apps; iAd is a distraction from that.

iAd hypocrisy

I was looking for a different old post in my archives, and stumbled on this one: “I hope iAd fails”, which I wrote 5 years ago this month. One of my points was that we had a healthy marketplace in the App Store for normal people to actually pay for apps:

“Do we really want to give that marketplace up? Because once it’s gone, and iAds are the norm, it will be an uphill battle to get anyone to pay for anything.”

Fast-forward 5 years to today, and well, we’re on that hill right now. Except there’s a landslide and I don’t know who’s going to get buried.

On the Upgrade podcast, Jason Snell and Myke Hurley talked about whether iOS 9’s Apple News was relevant: what problems is it solving, if any, and — because it will feature unblockable ads powered by iAd — how does it fit into the larger issue of blocking web ads and closed platforms? The discussion starts about an hour in.

(If you’ve used Apple News already, you may not have even seen any ads yet. But Apple’s page on Apple News Format makes it clear that they will be encouraging iAd for publishers: “Monetization is made simple with iAd”.)

I stand by the opinion that iAd is a mistaken strategy. Apple, if you’re serious about this fight with Google, go all-in on the fight and abandon iAd. It seems hypocritical to attack web ads while rolling out your own news platform with ads that can’t be blocked.

I hope iAd fails

I feel bad admitting it, because some of my friends are betting on iAd revenue to feed their family, but I’m just not on board with Apple running an advertising network. I don’t want to see ads in my apps, and I don’t want Apple to ever lose even a little of what it means to be a product-driven company.

We talk about this on Core Intuition. Nearly every chance I get I like to point out that all these free Google apps come at a cost. Take this tweet from last year:

“Google Voice is so awesome but I just think it’s dangerous to give Google this much power. Slippery slope, folks. You are not a customer.”

And this comment on MetaFilter:

“If you are not paying for it, you’re not the customer; you’re the product being sold.”

Some apps should absolutely be ad-suported (such as a search engine or social network), and many can be freemium (free versions supported by higher-priced subscriptions), but when given a choice I’d rather pay a fair price for a good service. When your customers are not your users, the product will suffer.

I know the world is full of ads already. We’re used to it — numb to it, maybe. But think about what the App Store has done: millions of people are paying real money for apps that complement ad-supported web sites. These same people would never pay a subscription fee to use the web site, but they’ll pay a few bucks for the same features in an iPhone app and it seems perfectly normal.

Do we really want to give that marketplace up? Because once it’s gone, and iAds are the norm, it will be an uphill battle to get anyone to pay for anything.