According to this Bloomberg report that reads like an intentional leak from Apple:1
Apple Inc. has constructed a secret team to explore changes to the App Store…
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.” …
About 100 employees are working on the project, including many engineers from Apple’s advertising group iAd that’s being scaled back, said the people, who asked not to be identified because the plans are private. The effort is being spearheaded by Apple Vice President Todd Teresi, who led iAd.
Lots of developers have thoughtfully weighed in with almost unanimous disdain and disbelief, and I mostly agree.
But Ben Thompson’s counterargument is especially worth reading:
As for the concerns of Apple bloggers that such a scheme will reinforce the tendency of the App Store to ensure the rich get richer, well, I’m sorry to say but there is no evidence that Apple cares. The company has done nothing to help developers with more traditional business models (i.e. not pay-to-play games) monetize; indeed, in a telling twist the team working on this search ad product is the former iAd team, which Steve Jobs himself said existed so that apps could be as cheap as possible.
“We” — by which I mean the community of well-read Apple writers and their small, well-known Mac and iOS developer friends — represent only a tiny fraction of the App Store by any measure: quantity, revenue, and quality.
The App Store isn’t ours, and Apple has little business justification to serve our interests. The idea that Apple should change the App Store to make it easier for us to succeed (and correspondingly harder for everyone else) is arrogant, exclusionary, and disconnected from reality.
Ask your non-geek friends or relatives which apps they use most. How many came from people like us, rather than a major tech company, social network, content publisher, retailer, bank, restaurant, big socially-manipulative game publisher, or bulk game cloner? We barely register for Apple or App Store customers.2
Apple does what’s best for Apple first, and the majority of their customers second. Sometimes that aligns with what our little group of developers wants, but usually not.
The only surprise is the idea that something major about the App Store may actually be changing, which has arguably never happened since its introduction in 2008. As Manton said, that’s a good thing: I’d rather Apple do tons of crazy experiments, some of which may hurt my business, than keep neglecting their major role in the entire consumer-software market by continuing to treat apps like music singles forever.
App Store search ads3 are absolutely plausible, especially if the staff and leadership of the alleged “improve the App Store” team came from iAd (whose staff originally drew heavily from web advertising companies). People apply the tools they know.
Such a system would exacerbate much of the App Store’s dysfunction, disincentivizing improvements to organic search and editorial features while raising the cost of acquiring new customers above what many indie developers and business models can sustain.
But it might not be all bad. Imagine if paid search was deployed tomorrow. (Because if it’s going to happen, that’s about as much say as you’re going to have in the matter.)
- What would you do?
- What would your competitors do?
- What would scammers do?
When I consider what paid search would really be like, it simultaneously sounds like a decent idea but also shows just how far today’s App Store is from doing a reasonable job of it.
Assuming the system would be auction-based by keyword like Google AdWords, for less-contested keywords, marketing apps could become much easier. Buying a few good phrases could inexpensively put your app at the top of the list to help you get off the ground and start to seed organic growth.
More significantly, we could buy increased exposure to the most likely customers to buy our apps. More paid-up-front apps could become viable, and prices could rise.
The App Store also has a serious “oversupply problem” — put less gently, it’s full of garbage. If searches were topped by apps that were actively being marketed with enough of a budget for a few keywords, finding good apps as a customer should become easier as well.
But the App Store’s infrastructure is utterly unprepared to do paid search well today.
Developers currently have very little idea where sales come from. We can track sales that come from websites, but most don’t, and any sales coming from within the App Store are a mystery. We have no idea whether people get our app from an editorial feature, a Top list, searching for it by name, or searching for it with other keywords.
For paid search to be worthwhile, we need to know which keywords to buy. We need to know the words people are already using to find our apps, and we need to know how we rank organically for those words. If we decide to buy some keyword ads, we need to know how many sales they brought in.
For the search ads to have more value and command higher prices, we’d also need more precise targeting — for instance, only buying a keyword when searched by someone in a certain region, in a certain age range, possibly with certain other apps installed or other creepy filters. (Which isn’t very Apple-like, but it sure makes ads more effective.)
Google figured this all out 15 years ago. Before that, they figured out how to do highly relevant organic searches, which Apple still doesn’t offer. And they were searching the entire web.
Not only is Apple searching the comparably tiny App Store, but they review every app before publishing it. With a huge staff of humans reviewing all of the input, good search should be much easier because the apps and their metadata should be relatively well-structured and regulated, and very little abuse and fraud should get through.
And yet, the App Store is still full of spam, scams, clones, and flagrant violations of Apple’s own rules, while the app-review team still capriciously nitpicks trivial and arbitrary details with the few developers who are actually trying to make good apps and represent them honestly in the Store.
While a good search-ad system could benefit the App Store, customers, and many of us, nothing in Apple’s track record suggests that they’re willing or able to do this well.
But a bad search-ad system, on top of bad search, will only further damage the App Store, funnel more of our already slim margins back into Apple like a massive regressive tax, and erode customers’ confidence in installing new apps.