Apple’s ad revenue is expected to grow from $5.6BN in 2023 to $13.7BN in 2027, resulting in an 83% increase. While these are projections (the actual ad revenue may be more), they are driven largely by the increased growth of iOS devices globally. Various factors contribute to this growth, including in key markets such as North America and Western Europe, meaning Apple’s growing global market stood at 25% as of the final quarter of 2023. iPhone users tend to spend more than Android users, making Apple Search Ads (ASA) a channel ripe for testing for many advertisers.
App Trends for Growth, Chapter #3: Capitalizing on the Growing Significance of Apple
Tips for Advertisers in Apple-dominated Markets:
- Increased competition necessitates more sophisticated campaign structures and optimization strategies. Keyword expansion is crucial to identify new and potentially niche themes for efficient user acquisition.
- As more brands compete for the same or similar keywords, marketers will need to continue to find new and potentially niche themes to continue to acquire new users efficiently.
- Other levers, such as Custom Product Pages (CPPs) and bid levels, must be evaluated continually. To drive efficiency, ensure App Store Optimization (ASO) efforts align with Apple Search Ads.
Tips for Android-dominated Markets:
- Apple is becoming a viable competitor due to rising iOS adoption. This presents an opportunity for brands to test into ASA as new iOS users seek apps they’re used to using on Android.
- Early ASA adopters may benefit from low competition in expanding Apple markets.
- Despite the global smartphone decline of 3% YoY (by Q2 2023), Apple stated that its sales rose by 1.5%, amounting to $51.3 billion. A significant percentage of this market share is gained from Android phones. Moreover, sales of refurbished iPhones rose by 16% globally during 2022. These factors further highlight the growing popularity of iOS devices and the increasing competition Android faces in this market.
These developments indicate that ASA has the potential to disrupt Android-dominated markets and that the iPhone market is booming and may be slowly overtaking Android. Optimizing ASA (Apple Search Ads) in less explored markets highlights one potential growth strategy.
Challenges of Apple Search Ads in Android-dominated markets:
In Android-dominated markets, Android enjoys a global market share of 70.79%, while iOS enjoys a 28.46% market share (as of Q1 ‘24). Marketers interested in Apple Search Ads should be aware of the following in Android-dominated markets and run structured, rigorous testing.
- Scale: The effectiveness of Apple Search Ads (ASA) has been limited by the volume of relevant queries in the App Store. There may be insufficient relevant search volume in Android-dominated markets to support ASA campaigns.
2. Uncertain consumer behavior: Consumers who migrate from Android to iOS may be in the early testing stage and not fully committed to the platform. This can make them hesitant to download and use apps or make in-app purchases.
Learnings from Developed Markets:
- Optimal campaign structure: Use campaign structures that have been proven to be effective in developed markets.
- Negative keywords: Use negative keywords to prevent your ads from showing irrelevant searches.
- Scalable keyword list: Start with a small, scalable keyword list and expand it as you gain confidence.
Strategies for Global Apple Search Ad Growth:
- Start slowly with efficient and scalable keywords from similar markets.
- Mitigate risk by understanding local market nuances.
- Test Search Match campaigns and Custom Product Pages as confidence grows.
- Use campaigns that have been successful in similar markets.
Tips for Optimizing Apple Search Campaigns:
For New or Expanding Brands:
- Identify and lower bids or pause underperforming keywords.
- Increase bids for top-performing keywords.
- Utilize a separate Search Match campaign to uncover new keywords.
- Incorporate discovered keywords into dedicated campaigns for testing.
- Include tested keywords as negatives in their original campaigns.
For Brands with High Keyword Volume and Variety:
- Establish unique Cost Per Acquisition (CPA) goals for each campaign type (Brand, Non-Brand, Competitor, Search Match).
- Conduct a thorough analysis of long-term keyword performance.
- Implement rules to adjust bids based on CPA performance.
- Determine when to pause and move on from underperforming keywords.
Building an Optimization Loop through combining approaches:
- Expand keyword coverage by utilizing both strategies.
- Scale successful keywords by increasing their bids.
- Evaluate the performance of newly discovered keywords before incorporating them.
- Pause underperforming keywords to optimize resource allocation.
- Continuously expand and scale successful keywords to maximize results.
The Future of Apple Search Ads:
Apple Search Ads will continue to become more sophisticated, with features like advanced keyword discovery and MMP integration. There is likely to be an ongoing focus on expanding additional placements and providing more customization and testing options for Custom Product Pages. Continuing to stay on top of ASA and ASO developments is a wise strategy for advertisers seeking efficient growth strategies. Contact us if you have any questions about how to run effective Apple Search Ads or App Store Optimization campaigns.
Further Reading:
Apple Search Ad best practice from Chris Khan, Director of Search & Social
Making App Store Optimization and Apple Search Ads work together
