Apple Allegedly Buys Ads for Subscription-Based Apps to Collect More Commission [Updated]

[TheMacDaddy1]

And this is why Apple crippled ad blockers in Safari .

I think we should have a new national holiday, "Ad-blockers Day". I never see ads

 

[scuac]

So a company is paying for advertising another company's products without the latter's consent, because it benefits the former... this is a very gray area, I am no lawyer but don't imagine this is technically illegal. But it is very dark gray area.

 

[boss.king]

Yup.
Co-promotion is not new, and has been done by retailers for ages. It's a win-win as both parties receive the sales.

Co-promotions aren't done without the consent of one of the parties.

 

[laptech]

You do not become a trillion dollar company by playing fair, playing by the rules, have morals or ethics.

You become a trillion dollar company by playing dirty but trying to make sure the other sides do not know just how dirty you are playing.

 

[timber]

Don't know about is offered in the USA but here you should get sued for advertising a really awful app like HBO.

The app, the content is another story.

 

[TheLinkster]

Completely unverified report of a perfectly legal arrangement, and the first 20 comments or so all call for Apple's hanging. I love this society we live in where you're guilty until proven innocent; evidence, sources, and quality of such mean nothing; and Forbes is considered a reliable news source.

 

[Analog Kid]

I’m not seeing the problem here. A developer offers an app on the AppStore, and they offer subscription through the app. Apple advertises for the product being offered through their service and direct them to their service.

Doesn’t the AppStore terms of service give Apple the right to promote and feature the app?

Is the alternative here that Apple has to hide what apps are available on their service?

I feel like there’s a lot of knee-jerk anti-Apple, anti-tech sentiment that just wants to spin everything into an evil conspiracy.

 

[jz0309]

I’m somewhat torn on this, it seems legit and shady at the same time, but, Forbes has turned into a shady click and bait outlet over the years and I don’t trust them at all anymore

 

[idktbh]

Yeah, you're absolutely right, I changed it to "adore" because of their products. Your viewpoint is much more healthy than my first version of my post.

"adore" ? what

 

[kpluck]

It seems every week that goes by exposes more shady behavior from Apple. Plus, my horrible experience with their trade-ins and the company that handles them, Phobio, I am beginning to think that Apple is truly a despicable company.

-kp

 

[twinlight]

Ummm...as I stated in my previous post...as a business owner myself...I would take this deal all day long! And the whole consent thing...I guess it depends on your worldview! Would you complain if somebody deposited $1000 in your bank account WITHOUT YOUR CONSENT?

Well, yes and no. It could be a money laundering scheme and I would not like to be made part of that.
This is shady marketing by Apple. It would be okay if they inform and get approval before running the ads.

 

[idktbh]

This is a completely legal procedure, fact-checkers say.

 

[Xtir]

Isn't this shady or what?

O well shady, wallmart and other companies are doing nothing else; commercials for third party products they sell.

The only difference: in apple's case you own the physical store (idevice), you pay the electric bills (charging), you provide the information for customer profiling to invade your privacy (further). Best of all you yourself (I, we) agreed to these practices by buying the idevices and apps and acknowledging to their terms.

Mr. Cook was right about: if you don't like it don't buy it (or something else)
The other way around however is also valid if mr. Cook doesn't like the terms to do business somewhere, don't sell there.

 

[Rigby]

Not sure what the issue is. It might be a bit embarrassing for Apple, but a store advertising wares it sells seems hardly illegal.

 

[lazyrighteye]

I haven't seen the contract between Apple and (say) HBO, obviously. But it would seem Apple would be well within their rights to advertise whatever apps they choose (likely their most popular), on whatever ad platforms they choose (Google being one of, if not the largest) and direct users to the App Store to download.

I'm pretty sure that's how every retailer that carries other brands (i.e. Target) does it. They have a hot item (say an Apple Watch), they advertise the crap out of it, getting paid for clicks, and then direct users to their store - be it brick and mortar or online - not Apple.com.

I'm not defending Apple here, at all, just not seeing the difference between what Apple is doing and what other retailers do. If I know anything about these forums, it's that someone here will enlighten me.

 

[Rogifan]

It seems pretty clear the cut Apple gets of in-app purchases is a crap ton of money and they’re going to do whatever they can to keep getting that money. Wall Street expects growth from ‘services’ and a large portion of ’services’ revenue comes from Apple’s cut of IAP.

 

[4ubrey]

So Apple’s ads generate 1000 sales (for example). Apple gets $300 and the app developer gets $700.
Seems like a win/win to me.

The problem is if the developer can get those users for a lower price with their own acquisition tactics (lower than 30% of their revenue that is) while Apple is bullying their keywords they are actually losing money.

Ex. Netflix pays apple 30% of rev of a user that lasts 3yrs = $162 (30% of $15 for 36mo)

Netflix acquires a user via their own methods and spends $22… it’s $22 once.

It does seem like a win at surface level, but from user growth perspective it’s really bad. It’s also a perpetual spend.

 

[Rogifan]

I love admire Apple very much and I adore my new 14" MBP, but my god are they greedy with the App Store. It's like these are two different companies, on one side there are these amazing devices and on the other side there's abysmal treatment of developers and this penny-pinching - just to name a few things. In his recent The Talk Show episode, John Gruber quoted a friend of his with a quote which is so true: "Apple does one thing great: they make creative tools for people and sell them at a fair price that people will pay for it and everything else they do is - it ruins the good part of Apple. Everything else. It's corrupting.". I really would love to see them stepping back from the greed and their addiction to App Store revenue, but I think the only way they learn is when there is intervention from the outside.

It would be nice if people like Gruber took Apple to task more when it comes to some of this stuff. Jason Snell has no problem doing so.

 

[DonutHands]

This is a completely legal procedure, fact-checkers say.

- Fact-Checkers™ subscribe today through in-app purchase. Only available in the Apple App Store!

 

[Rogifan]

So Apple’s ads generate 1000 sales (for example). Apple gets $300 and the app developer gets $700.
Seems like a win/win to me.

You’re assuming these sales wouldn’t be generated without Apple’s ads. From the names of the companies Apple is allegedly placing ads on (like HBO Max) that seems dubious.

 

[JM]

Apple allegedly buys Google ads for popular subscription-based third-party apps to bolster its collection of commission on in-app purchases, according to an investigation by Forbes.

Apple has purportedly been buying Google ads for subscription-based third-party apps, including HBO, Masterclass, Babbel, Tinder, Plenty of Fish, and Bumble, for at least two years. A marketer speaking to Forbes suggested that many of the brands Apple appears to be advertising for have been assertive about attempting to circumvent App Store policies. The ads are said to be placed without the developer's consent and Google apparently refuses to remove them.

The ads do not disclose that they are paid for by Apple, but redirect to the App Store rather than subscription sign-up pages on the brand's website. One source, speaking to Forbes, explained:

Ads encouraging users to subscribe to a service usually lead to pages that encourage users to sign up online, bypassing Apple's 15 or 30 percent in-app purchase fee and allowing the business to collect all of the subscription's revenue.

Google claims that it is not responsible for who buys ads on its platform. Google's ad policies allow companies to use another company's trademark if "primarily dedicated to selling (or clearly facilitating the sale of) products or services, components, replacement parts, or compatible products or services corresponding to the trademark."

There are apparently indications that Apple is hiring a single agency to place the ads since they each have "similar tracking links with near-identical parameters."

Forbes speculates that Apple's unsolicited ads are potentially losing some third-party apps millions of dollars in revenue and resulting in high customer acquisition and advertising costs for their own campaigns, since prices rise when multiple parties bid on the same ad slots. The practice amounts to "a form of ad arbitrage," according to Forbes.

Article Link: Apple Allegedly Buys Ads for Subscription-Based Apps to Collect More Commission

The third party companies dont want the ”free” advertising paid for by the company that provides them with a platform to distribute their product?

Huh?

Bite the hand that feeds much?

That “millions of dollars of revenue” they predict they’re losing might amount to “thousands of dollars” if they didn’t have Apple helping them advertise their product. Pay the
30% and stop whining.

Can’t blame them though…. Business is battle. The third party wants to make more money, so they’ll fight any way they know how.

And, for the small third party app developer? The article does not mention them: the article lists some big companies worth millions and millions of dollars, not your next Flappy Bird.

 

[boss.king]

I haven't seen the contract between Apple and (say) HBO, obviously. But it would seem Apple would be well within their rights to advertise whatever apps they choose (likely their most popular), on whatever ad platforms they choose (Google being one of, if not the largest) and direct users to the App Store to download.

I'm pretty sure that's how every retailer that carries other brands (i.e. Target) does it. They have a hot item (say an Apple Watch), they advertise the crap out of it, getting paid for clicks, and then direct users to their store - be it brick and mortar or online - not Apple.com.

I'm not defending Apple here, at all, just not seeing the difference between what Apple is doing and what other retailers do. If I know anything about these forums, it's that someone here will enlighten me.

Generally, the company for whatever product is being advertised is required to sign off on the ad before it runs. This also allows them to plan their media spending accordingly, so that they're not directly bidding against a partner for ad placement.

The allegation that Apple is running these ads secretly is the really shady part of this. Apple is driving up the cost of user acquisition for the developer, and then taking a cut where they might not have before.

Whether it's technically illegal or not I can't say, but it's certainly not the norm for these sort of things.

 

[TTTedP]

How is this news?
Walmart also advertises Colgate products so people buy them at Walmart.

How is this different?

fair point

 

[MrENGLISH]

I don’t see a problem with this and personally think it is a brilliant move on Apple’s part.

How is this any different than say Wal-Mart advertising a product and that advertisement linking to Wal-Mart’s website for purchase?

As long as Apple isn’t misrepresenting the product or service in the ad, I don’t see how any of these companies can argue that Apple’s ad hurt them.

If anything, it got them a sale they may not have otherwise made without Apple promoting their product or service.

 

[q64ceo]

Apple buys adds from Google. This is bad...because...?