iPhone eventSource: Apple

What you need to know

  • A new report says Apple has been buying up Google ads for other people's apps on the App Store.
  • Forbes claims that Apple may have collected millions in revenue from subscriptions.
  • Developers say Apple is driving customers to the App Store rather than web purchases so it makes more money.

Update, November 15 (8:00 pm ET): Apple says that the Forbes report is a "mischaracterization" of what the company is doing.

A new report from Forbes claims Apple is "secretly" buying up ads for high-value apps on its App Store to make money.

From the report:

Apple is secretly buying Google ads for high-value apps to collect potentially millions of dollars in subscription revenue, multiple app publishers have told me. Apple is placing the ads without the app developers' consent, and Google won't delete them, they say.

The cost: potentially millions of dollars in lost revenue. Plus, high advertising costs for their own campaigns.

Impacted apps reportedly include Tinder, Bumble, and HBO, as well as Masterclass and language app Babbel. The report says that ads don't disclose that they're from Apple and look to the naked eye like they come from the brands and publishers represented, however:

The ads don't disclose that they are from Apple and would, to most observers, simply look like ads from the brands and app publishers themselves that happen to go right to the App Store. They do, however, have similar tracking links with near-identical parameters that indicate one agency is likely placing all of them.

The report did not provide any conclusive evidence that it was Apple behind the ads, save that the similar tracking links "indicate one agency is likely placing all of them."

One source told the report Apple was "trying to maximize the money they're making by driving in-app purchases that people buy through the Apple Store," and had "figured out they can make more money off these developers if they push people to the App Store to purchase there versus a web flow."

Multiple "major mobile brands" claimed the practice was hurting their businesses because customers that came through the App Store were worth 30% less. The report also says that because Apple was allegedly buying the adverts, the companies themselves also had to pay more to advertise because this drove up costs.

One marketer, however, told Forbes that "many of the brands that were experiencing this issue were aggressive about attempting to circumvent App Store policies around monetization" but that the tactic of placing ads for other companies' products was "a little underhanded."

The news is pertinent as the issue of in-app payments continues to rage in the sights of antitrust probes and the ongoing Epic Games trial, where a judge has ordered Apple should stop prohibiting developers from telling people about other ways to pay for digital goods and including links to external payment methods.

Update, November 15 (8:00 pm ET) — Apple says that the Forbes report is a "mischaracterization" of what the company is doing.

In a statement to MacRumors, Apple says that the Forbes report is a "mischaracterization" of what the company is doing. Apple says that it has been buying ads on platforms like Google and that it is a standard business practice to purchase ads for products that a company sells in its store.

Apple indicated that this is no different from retailers running ads for the products they sell, and is a very standard business model. Apple is granted conventional legal rights to advertise in this way in the agreements it has with developers.

Apple says that the allegation that it is "secretly" or "quietly" purchasing ads for developers without their knowledge or consent is an overt mischaracterization. On the contrary, the company says that it regularly engages in conversation with developers about the ads it places and many developers express their appreciation for this support.

Apple says that it is committed to providing developers with the resources they need to be successful on the ‌App Store‌. These resources include compilers, testing and debugging tools, technical support, SDKs, libraries, APIs and more, but they also include advertising both inside and outside the ‌App Store‌.