Apple has been secretly buying Google ads for large apps to generate subscription income

Apple appears to have come up with a legitimate but nifty scheme designed to generate millions of dollars in revenue from high profile subscription apps like Tinder and HBO. This is the purchase of Google Ads that take customers to an app page on the App Store, which may prevent users from realizing that they can also subscribe on the web.

HIGHLIGHTS

  • Apple buys Google ads for large subscription apps that lead to App Store pages
  • Apple wants to subscribe to the user via his in-app purchase within an app
  • In-app subscriptions are subject to a 30 to 15 percent cut by Apple
  • Compare this to external web subscriptions, which are taking Apple the cut

Why Apple is buying Google ads for subscription apps

For years, Apple’s control rules forbade developers from even informing customers about sign-in methods other than Apple’s own in-app purchase mechanism, let alone providing a link or button to actually lead the user to their own sign-in page. But Apple bowed to pressure from regulators and now all “reader” apps can provide such in-app links for customers. Read: How To Download iPhone Apps That Are Not Available In Your Country

But when a user posts a link to a. follows Netflix On the login page to purchase a subscription on the Internet with alternative payments, Apple’s 30/15 percent cut does not apply. With this important change coming soon, the company has found a smart way to generate that revenue even if app developers choose to implement external web links.

John Koetsier, Forbes:

Apple is secretly buying Google ads for high quality apps for potentially millions of dollars in subscription revenue, several app publishers told me. Apple is placing the ads without the app developers’ consent, and Google won’t delete them, it said.

The cost: potentially millions of dollars in lost revenue. In addition, there are high advertising costs for your own campaigns. It is a form of ad arbitrage, they say, and has been for at least two years.

These ads ensure that the App Store link for HBO, e.g. example, is the first thing people see in their search results when they search for “HBO” rather than the official HBO website. Apple has done this for select apps that generate millions of dollars in subscription revenue, including dating apps like Tinder, Plenty of Fish, and Bumble, as well as large streaming apps, apps with expensive subscriptions like Masterclass, and so on.

The ads don’t reveal that they’re Apple and, to most observers, would simply look like ads from the brands and app publishers themselves that happen to land straight in the App Store. However, they have similar tracking links with nearly identical parameters suggesting that an agency is likely to place them all.

Developers aren’t too happy about this:

When people purchase access to a service through a subscription in an iOS app, they are essentially Apple’s customers. In order to protect privacy, Apple does not provide much information about them to the apps or companies that run the apps. This means that it is difficult to provide customer service, address problems, or solve problems.

Apple is painfully aware that if it lifts the anti-steering rule on December 9, 2021, some of the subscription revenue it collects from apps will be lost. It’s in Apple’s best interest to maximize the money it makes from in-app purchases, but keeping advertisements away from web subscriptions to people can be exactly the kind of dirty business tactic the company is primarily into with regulators brought hot water.

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