The Apple and Google Updates You Can’t Miss: Mobile Growth Food for Thought (#75)

In this newsletter, we are covering the two quite major announcements that came out of Cupertino and Mountain View, and see what it means for mobile growth practitioners.
Google Play capabilities: 2022 update

Apple Search Ads are expanding to Today Tab and Product Pages

This is an important one to note

In a podcast I did with the great Adam Jaffe almost a year ago (check it out here), I said that I believe Apple Search Ads would take advantage of the ad network ecosystem’s hit with iOS 14.5 and the new privacy restrictions. 

It was pretty clear to me that Apple would work to expand its inventory in light of the surging demand by advertisers for Search Ads (to capitalize on high-quality placements and potential downloads). 

This, I argued, would take place in three stages. First, Apple would expand to more placements within the App Store app, then they’ll expand to more Apple Services (the same way they did with News, and Stocks), and lastly, they’ll offer independent app developers to use Apple Ads to monetize their apps and games with Apple display ads. 

As Apple Search Ads is the only ad network that can still use valuable personal data (which apps and games users downloaded, engaged with, and made an in-app purchase), they would have a substantial advantage over all other ad networks.

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So we are basically in phase two of this plan IMO, where Apple just rolled out an extremely valuable placement within the Today tab feed. The volume of impression ads in these placements would be almost equal to the number of users that open the App Store (more than 500M which is pretty similar to Instagram DAU).

The competition for this placement will probably be fierce, so I expect the CPMs to be relatively high, at least until the path to ROAS is clear, as the audience browsing the Today tab is still way broader than the audience searching for a  specific keyword. 

The last time ASA expanded its inventory was through ads in the Search tab, on top of the Suggested Apps list, which showed unfavorable unit economics as the audience was too broad. 

That being said, the prominence of a Today tab ad, which looks almost the same as a featuring placement, is likely to have much better economics, more closely resembling being organically featured. 

The other placement ASA announced is significantly less interesting; it is located at the bottom of product pages in the Apps you might like section. From Storemaven product page a/b testing data from hundreds of millions of users, we know that a very low % of users that visit a product page ever reach that section. 

Expecting that placement to generate a sizable impression volume is probably a stretch. 

On the ethical side, some questions arise. How can ASA allow your competitors to place ads on your product page? You and your marketing & UA team spend time and money and make an effort to drive your audience to your product page. Allowing your competitor to pay Apple to “steal” users that you drove to your page (potentially through a paid ad, so it cost you money) is an unclear decision to me. 

It’s not very far from allowing your competitors to bid on your brand keyword which is a prevalent activity that is well accepted in the industry, but to me, it’s the difference between Google Search allowing you to bid for a competitor’s brand keyword to Google suddenly “forcing” an ad on your website landing page from the same competitor. A bit over the line if you get what I mean.  

But in any case, don’t sweat too much (although you’re probably in a heat wave right now) because this placement is unlikely to attract a significant percentage of your product page visitors away from your product given its unfavorable placement. 

To conclude, I think that reading into this move, we can definitely feel how aggressive Apple is in doubling down on expanding ASA’s inventory, so the likelihood of Apple introducing a display ad product that app developers can use to monetize their apps (and advertisers reach that inventory with an Apple DSP) with “approved and user-private” Apple Ads, is a logical next step. 

Don’t believe it yet? read this Digiday analysis of a recent job post by Apple for someone to lead the creation of an Apple DSP.

What do Android restrictions on Ad Placements in apps mean?

A bit of a storm has hit mobile growth related Twitter feeds this week, given an announcement by Google that it’ll be introducing new ad guidelines for apps and games published through the Google Play store. 

The guidelines say the following (you can check out the official announcement there are a few examples there as well):

  • Full-screen interstitial ads of all formats (video, GIF, static, etc.) that show unexpectedly, typically when the user has chosen to do something else, are not allowed. 
  • Ads that appear during gameplay at the beginning of a level or during the beginning of a content segment are not allowed. 
  • Full-screen video interstitial ads that appear before an app’s loading screen (splash screen) are not allowed.
  • Full-screen interstitial ads of all formats that are not closeable after 15 seconds are not allowed. Opt-in full-screen interstitials or full-screen interstitials that do not interrupt users’ actions (for example, after the score screen in a game app) may persist for more than 15 seconds.

Some chatter from folks such as Eric Seufert argued this will be the end of the hypercasual category that relies heavily on ad monetization. Others said it’s not as bad. You can read about those opinions here.

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I believe that the takeaway from this is: 

  • Any developer that is a “bad actor” trying to trick users into not being able to close or skip ads will be significantly hurt. 
  • Any developer working with known and legit ad networks can expect some changes to the timing in which ads are shown (because most of them are already compliant with the other requirements). 

These changes will be mostly around when and where ads are served within a game. How Google would define “beginning of a level” would be crucial here. But I don’t believe Google’s intention is to eliminate ads altogether, just to make sure they are less intrusive and more expected. 

Depending on what is banned on ads that show at the beginning of a level, some effect can be expected that would lower the overall ad impression a game can generate from a single average user. If ads are pushed to later within each game session, user drop rate curves would dictate how many users would leave the game before seeing an ad, that previously they saw because it was shown at the very beginning of their session. 

But as long as Google allows ads to continue to be served, just slightly later in a user’s session than they used to, I don’t believe the entire hypercasual business model would collapse. ARPU would decrease a bit, and CPIs would decrease as well following that effect, given advertisers would be willing to bid less for each hypercasual install. 

Some equilibrium would be maintained, and I don’t see it as the end of hypercasual games as we know them. We’ll continue to monitor these requirements and let you know when Google offers more clarity.

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Jonathan Fishman
About Jonathan Fishman
Jonathan is Storemaven's VP of Marketing and Growth. Before joining Storemaven he spent ten years commanding tanks, working on Wall St., consulting high-growth companies, and exploring Black Rock City. In his spare time, he likes building things from wood, listening to Frank Zappa, and spending time with his daughter.

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