Last week, a few mobile publishers accused Apple of secretly running ad campaigns on Google to boost its own revenue from subscription apps. The company itself, however, claimed that it always communicates with developers about these actions.
This story started on November 12 after Forbes published an article about Apple “quietly” and “secretly” buying ads via Google for certain apps. According to a few anonymous publishers and developers, it was unethical and unfair.
Apple reportedly has been doing it for the last couple of years, running ad campaigns for subscription apps and services like HBO, Tinder, Plenty of Fish, and Babbel. “Apple has figured out that they can make more money off these developers if they push people to the App Store to purchase there versus a web flow,” a source told Forbes.
That’s why some developers think that Apple is doing some form of ad arbitrage, i.e. attracting new clients into certain third-party apps in exchange for a percentage of their revenues.
Apple still charges devs of subscription apps with a 30% fee, which reduces to 15% after the first year. So it simply earns more money by promoting popular apps on Google.
According to the Forbes sources, the company doesn’t tell developers about these campaigns, which leads to higher advertising costs for their own campaigns. “LTVs are lower … so it doesn’t just cost more to advertise, but you can’t spend as much,” one source said. “Apple is not just making more money off developers … it’s hurting their business.”
Apple commented on the issue on November 15. It told 9to5Mac that it has been running such campaigns for over five years now. The company, however, said that it doesn’t do it “secretly,” as it always communicates with developers of these apps.
Apple compared its actions to the way retailers advertise products they sell in their stores. So the company basically promotes more than 100 apps presented on the App Store using platforms like Google, TikTok, Twitter, Snapchat, and YouTube.