Dive Brief:
- Bloomberg reported late last week that Apple has a team of 100 people working on building a paid search type capability for the App Store.
- Because the App Store has grown to more than 1.5 million apps, it’s difficult for developers to get their apps in front of potential users.
- Bringing paid search to the App Store also would allow Apple to grab some of the marketing budget from app developers currently being spent on app install ads generating revenue for Google, Facebook and Twitter.
Dive Insight:
The reported paid search team includes engineers from Apple’s iAd advertising group and led by vice president Todd Teresi.
The move would help app developers as well as provide Apple with a new revenue stream from the store. According to eMarketer, mobile app install ads were expected to reach $3 billion last year accounting for more than 10% of mobile ad budgets with an 80% year-over-year increase in spending.
App and services-related revenue amounted to around $20 billion for Apple last year.
Given app developers’ interest in spending on advertising, a paid search option to reach potential customers at the App Store would likely be a popular format.
