Under the Radar

00:00:00 ◼   ► Welcome to Under the Radar, a show about independent iOS app development.

00:00:04 ◼   ► I'm Marco Arment.

00:00:05 ◼   ► And I'm David Smith.

00:00:06 ◼   ► Under the Radar is never longer than 30 minutes, so let's get started.

00:00:10 ◼   ► So last week Apple launched App Store search ads finally after we first heard about them

00:00:14 ◼   ► in June.

00:00:15 ◼   ► Now they are launched, they are running, and you can buy them.

00:00:18 ◼   ► And we have, and we like to share our experience with that.

00:00:21 ◼   ► And I think we've had, I've had a lot of questions from developers about just what some of the

00:00:25 ◼   ► terms mean with what you're buying, the reporting that you get from the App Store search ad

00:00:30 ◼   ► system.

00:00:31 ◼   ► So I thought first we'd go over a quick introduction to the basic terminology of buying and selling

00:00:37 ◼   ► ads on the internet.

00:00:39 ◼   ► And this will lead into specifics about the App Store search ads.

00:00:42 ◼   ► So first, you know, I wanted to first go over some very basic stuff.

00:00:46 ◼   ► So what is, you know, things like impressions, taps, conversions.

00:00:50 ◼   ► So very, very basically here, I'll try to go through this relatively quickly.

00:00:53 ◼   ► An impression is just how often an ad is shown.

00:00:56 ◼   ► It's one showing of an ad to one person.

00:00:58 ◼   ► A click or a tap, that's obvious.

00:01:00 ◼   ► And then a conversion is when somebody who has clicked on or tapped on that ad then does

00:01:06 ◼   ► what the advertiser wanted.

00:01:07 ◼   ► So usually it's buying something in a store or it's like creating, signing up for a new

00:01:11 ◼   ► account on a site or a service.

00:01:13 ◼   ► Or in the case of search ads for apps, installing the app.

00:01:17 ◼   ► So that is the conversion, you know.

00:01:19 ◼   ► And ads are priced in different ways.

00:01:21 ◼   ► One of the most common and kind of the baseline is CPM, which stands for Cost Per Mille, which

00:01:26 ◼   ► is the French word for thousand, which I'm probably mispronouncing.

00:01:30 ◼   ► Basically cost per thousand impressions.

00:01:32 ◼   ► So how much you pay per thousand people who see the ad.

00:01:36 ◼   ► The CPM model strongly favors publishers generally in like where it places the risk.

00:01:43 ◼   ► If I'm showing the ad and somebody sees it but they decide not to click on it or they

00:01:47 ◼   ► decide not to go through and buy it, who bears that cost of somebody seeing the ad but

00:01:51 ◼   ► just the ad not working.

00:01:53 ◼   ► With CPM, the publisher gets paid regardless of whether the ad has worked.

00:01:58 ◼   ► It does however have some weird incentives.

00:02:01 ◼   ► It incentivizes publishers to put as many ads on screen as possible.

00:02:04 ◼   ► That's why you have pages that are absolutely full of ads.

00:02:07 ◼   ► There's also kind of no guarantee that people are actually really seeing it.

00:02:12 ◼   ► Like it's showing somewhere and there's kind of no relation between what the advertiser

00:02:17 ◼   ► is paying and how interested the viewers are in the ad or whether they even saw it.

00:02:23 ◼   ► So of course this also creates high fraud potential.

00:02:25 ◼   ► You can kind of set up like big farms and things to generate fake impressions or impressions

00:02:30 ◼   ► that are just from bots or from things that will never lead to anything.

00:02:33 ◼   ► So then there's kind of this middle ground, cost per click or tap.

00:02:37 ◼   ► CPC advertising is kind of in the middle.

00:02:39 ◼   ► It kind of splits the risk between publishers and advertisers.

00:02:44 ◼   ► The publisher is paid when they deliver interest to the ad.

00:02:47 ◼   ► They're paid when somebody clicks on the ad.

00:02:50 ◼   ► But then it's kind of up to the advertiser to turn that click into a sale if they can.

00:02:55 ◼   ► With this there is still fraud potential.

00:02:58 ◼   ► That's fairly significant.

00:03:01 ◼   ► It kind of incentivizes publishers to place ads where they're going to be accidentally

00:03:05 ◼   ► clicked.

00:03:07 ◼   ► There's not a very high cost to generate fake clicks through bots and farms and stuff.

00:03:12 ◼   ► And then the third kind of ad payment is CPA.

00:03:15 ◼   ► This is cost per action or acquisition.

00:03:18 ◼   ► And that's kind of translated as cost per sale basically or cost per conversion.

00:03:22 ◼   ► This strongly favors the advertiser in the relationship.

00:03:25 ◼   ► This kind of places all the risk of whether the ad will work or not on the publishers.

00:03:29 ◼   ► You know, the publishers are not going to get paid unless somebody actually not only

00:03:33 ◼   ► clicks on the ad but goes and downloads the app or creates an account or makes a sale.

00:03:38 ◼   ► There's very low potential for publisher fraud here.

00:03:41 ◼   ► I mean you could theoretically, and I'm sure people do, create farms of people to go buy

00:03:46 ◼   ► things with stolen credit cards or to go install apps on fake accounts or on fake devices.

00:03:52 ◼   ► But this is a lot more involved than just like basic click fraud or impression fraud.

00:03:56 ◼   ► If you are buying the ad as an advertiser, you generally want this last method, CPA,

00:04:01 ◼   ► because you're only paying if somebody actually buys your app or creates an account on your

00:04:06 ◼   ► site or whatever else and makes a sale on your site.

00:04:09 ◼   ► That's ideal for you as the advertiser because first of all it will be easier to figure out

00:04:13 ◼   ► what to pay because you'll know what you'll make.

00:04:15 ◼   ► And also you don't really take any risk there.

00:04:18 ◼   ► The risk of a thousand people clicking on your ad and then none of them buying anything,

00:04:22 ◼   ► you're not bearing that risk because you're not paying for people who don't buy anything.

00:04:25 ◼   ► So as a buyer of ads, you want CPA.

00:04:28 ◼   ► As a seller of ads, whether you're running a website or running a storefront that has

00:04:32 ◼   ► search ads in it or if you're running a podcast, podcasts work this way too, as a seller of

00:04:36 ◼   ► ads, you want CPM because you want to be like, well, I delivered a bunch of people who were

00:04:42 ◼   ► exposed to your ad, the rest is up to you.

00:04:44 ◼   ► So CPC, the cost per click or tap is kind of the compromise.

00:04:49 ◼   ► Nobody really loves it.

00:04:51 ◼   ► There are still problems with it, but it is probably the most pragmatic compromise between

00:04:54 ◼   ► them in most cases.

00:04:55 ◼   ► And then there are just a few little terms you might see around that are useful to know

00:04:59 ◼   ► here.

00:05:00 ◼   ► CPM, which stands for effective CPM, is when you are paying per click or per action, you

00:05:07 ◼   ► basically just divide it out by the number of impressions.

00:05:10 ◼   ► So it tells you roughly what you are earning per thousand page views or impressions or

00:05:15 ◼   ► whatever or what you're paying per thousand and pages impressions, even if you're not

00:05:19 ◼   ► paying per impression technically.

00:05:21 ◼   ► You'll see on Apple's reports for this, you'll see terms like CTR or TTR.

00:05:25 ◼   ► This is a click through rate or tap through rate.

00:05:28 ◼   ► TTR is one of the last columns in the search ads.

00:05:30 ◼   ► You will see it if you do this.

00:05:32 ◼   ► That stands for tap through rate, which is the percentage of impressions of the ad that

00:05:36 ◼   ► result in taps on the ad.

00:05:38 ◼   ► And then CR at the very end of Apple's reports, CR stands for conversion rate.

00:05:43 ◼   ► So this is the percentage of clicks on the ad that result in installations of the app

00:05:48 ◼   ► or sales or whatever else.

00:05:50 ◼   ► That's it for the basics.

00:05:51 ◼   ► Do you have anything to add for that?

00:05:53 ◼   ► No, I mean, I think the important thing, though, to keep in mind with all of this stuff is

00:05:57 ◼   ► that this type of advertising is usually, it's basically a numbers game where the

00:06:04 ◼   ► purpose of the advertising is to drive people to do something that the advertiser wants.

00:06:11 ◼   ► And the way you do that is you have these, I think they call it a funnel is the fancy

00:06:16 ◼   ► term for it.

00:06:17 ◼   ► So if you ever see like a sales funnel or something, that's where it's coming from.

00:06:20 ◼   ► But it starts off where you cast this very wide net, which is where you start to get

00:06:24 ◼   ► into the impressions side of things.

00:06:26 ◼   ► Like you just say you throw something out to thousands of people.

00:06:30 ◼   ► And then a certain subset of those will pay attention to that.

00:06:34 ◼   ► And a smaller subset of that of them will take some action as a result of that.

00:06:38 ◼   ► And then perhaps an even smaller set will actually do the final thing, whatever that

00:06:42 ◼   ► is, that's download the app in this case.

00:06:45 ◼   ► And so all of the terms and things are all about trying to understand that process.

00:06:51 ◼   ► And in many ways, it's just a numbers game at a certain point that obviously, each person

00:06:57 ◼   ► who's deciding whether or not to click on an ad is making a choice.

00:07:01 ◼   ► And obviously, but from a, you know, the holistic perspective, there are far too many people

00:07:06 ◼   ► making far too many choices for that to be something you could really think about.

00:07:09 ◼   ► And that's why you tend to roll it all up into these, you know, you don't think about

00:07:13 ◼   ► a impression, you think about thousands of impressions, gives you a sense of the kind

00:07:16 ◼   ► of scale that this process tends to work in.

00:07:19 ◼   ► And that's why I think advertising is so numbers based, is just, you know, it's not

00:07:24 ◼   ► really, it's not that same thing of a sales thing where you're making a, you know, making

00:07:28 ◼   ► a cold call to a person and trying to have a direct interaction, you are just blasting

00:07:33 ◼   ► out ads to all kinds of different people in the hopes that a small, you know, a small

00:07:38 ◼   ► subset of those people will find what you're doing interesting.

00:07:41 ◼   ► And that's why it's so data driven.

00:07:43 ◼   ► And as I can tell, like that's most of advertising is this kind of dialing things

00:07:47 ◼   ► around to try and hit the point where you're making money but not losing money, or getting

00:07:54 ◼   ► the, you know, if you have a target for the number of acquisitions you have, you can work

00:07:57 ◼   ► out well, how many impressions do I need to generate that amount of interest?

00:08:00 ◼   ► And it's all kind of just, you know, multiplying and dividing with these kind of numbers.

00:08:05 ◼   ► All right, so moving on to specifics about the Apple search ads.

00:08:10 ◼   ► First of all, it's important to understand how the pricing works.

00:08:13 ◼   ► This is, it's priced in a way that's known as a Vickrey auction or a second price auction.

00:08:18 ◼   ► This is exactly the same way that Google AdWords works as far as I know, or at least, you know,

00:08:23 ◼   ► in the ballpark.

00:08:25 ◼   ► And it's also, if you ever bought anything on eBay, it is very similar to how standard

00:08:28 ◼   ► eBay auctions work.

00:08:30 ◼   ► Basically the highest bidder for a certain keyword or whatever, the highest bidder for

00:08:34 ◼   ► that keyword wins and gets their ad shown and pays.

00:08:38 ◼   ► But they only pay the amount of the second highest bidder on that ad.

00:08:43 ◼   ► So you basically bid what's the most you're willing to pay for this keyword.

00:08:47 ◼   ► And so if you bid 50 cents and someone else bid 25 cents, you will win the auction but

00:08:52 ◼   ► you'll only pay 25 cents or some incremental thing over it, like 26 cents or, you know,

00:08:56 ◼   ► whatever it is.

00:08:57 ◼   ► This actually is very favorable to the buyer, to the advertiser, because you only pay just

00:09:04 ◼   ► enough to win the auction but no more than that.

00:09:07 ◼   ► So anything else that's between that and your bid, you just get to keep that money.

00:09:10 ◼   ► That's your surplus.

00:09:12 ◼   ► There are some big limitations in the Apple search ads that other advertiser systems don't

00:09:18 ◼   ► necessarily have or don't usually have.

00:09:20 ◼   ► One of the biggest ones is that you don't have a lot of control over the look and content

00:09:26 ◼   ► of the ad itself.

00:09:28 ◼   ► The ad is kind of these fixed format things that Apple has.

00:09:31 ◼   ► It has your app's title, it has your app store description.

00:09:35 ◼   ► Does it have star ratings?

00:09:36 ◼   ► I think it does, right?

00:09:37 ◼   ► In the example when it does, in the search portal it shows the rating but I've seen

00:09:45 ◼   ► some in the app store that don't and some that do.

00:09:47 ◼   ► So I don't know if it includes it or if it only includes it if it has a certain number

00:09:51 ◼   ► of ratings or if there's something more going on there.

00:09:53 ◼   ► But it may or may not include your star rating.

00:09:56 ◼   ► Right.

00:09:57 ◼   ► So it basically is like a tiny version of your app store entry, of your search entry.

00:10:02 ◼   ► So title, the first line of the description, sometimes screenshots, sometimes star ratings.

00:10:10 ◼   ► And one of the problems with this is that you as the advertiser, you don't really have

00:10:15 ◼   ► a good way to A/B test anything.

00:10:17 ◼   ► So if you want to A/B test two different description lines there and see which one generates more

00:10:23 ◼   ► tap throughs or more clicks or more sales, the only way you can really do that is to

00:10:28 ◼   ► change your description every so often but then you can't test those at the same time

00:10:32 ◼   ► with the same impression.

00:10:33 ◼   ► So it's a less scientific test.

00:10:35 ◼   ► It makes it harder to know what is an effective description or what are effective screenshots

00:10:41 ◼   ► to show there or whatever else.

00:10:42 ◼   ► You know, again, you can test them just by changing them but then that changes them everywhere

00:10:46 ◼   ► and you can only do that within a certain time granularity.

00:10:50 ◼   ► So it's not a great test.

00:10:51 ◼   ► Yeah.

00:10:52 ◼   ► And I think it's also probably a good point to point out there that what you're doing,

00:10:55 ◼   ► what you're showing is the same thing that you'll show on your app store page.

00:11:00 ◼   ► And so you could potentially imagine wanting your ads to be geared towards a particular

00:11:07 ◼   ► demographic or type of customer that is more specific than your generalized app store page

00:11:16 ◼   ► but just something that we can't do.

00:11:17 ◼   ► And so you could imagine you're having an ad that you're running on a website that's

00:11:21 ◼   ► geared towards a fan of a very particular thing or a particular style.

00:11:27 ◼   ► You just try different colors, see what people like.

00:11:30 ◼   ► But what we have here is just whatever you're doing for your general purpose app store description

00:11:36 ◼   ► is the same thing that will be shown here.

00:11:38 ◼   ► And so it's nice in that there's less work for us to do, I suppose.

00:11:43 ◼   ► Yeah, that actually is really nice.

00:11:46 ◼   ► I didn't have to come up with a creative for this.

00:11:48 ◼   ► I think it's the fancy, if you're ever in marketing and they call it like, "Get

00:11:51 ◼   ► me your creative," the creative is like the picture or the text or whatever it is

00:11:57 ◼   ► that you want to put in the ad.

00:11:59 ◼   ► But we have nothing to do with that.

00:12:01 ◼   ► In many ways, Apple is making it appear.

00:12:03 ◼   ► It looks just like a regular search result.

00:12:05 ◼   ► And so just whatever you put in there is what's going to show up.

00:12:08 ◼   ► And so you have to make sure that you're appealing.

00:12:12 ◼   ► It's appealing both as a search ad as well as appealing as a search page that ultimately

00:12:19 ◼   ► they're going to go to and look at in the app store.

00:12:21 ◼   ► Which is probably good practice anyway.

00:12:23 ◼   ► Sure.

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00:14:27 ◼   ► All right, so now that we've discussed kind of, you know, ad basics and a few things that

00:14:32 ◼   ► make the App Store ads a little bit different, let's talk about the actual process of buying

00:14:37 ◼   ► App Store ads for your app.

00:14:39 ◼   ► The first obvious question here is how do you know what you can pay per tap?

00:14:45 ◼   ► So App Store ads are billed per tap, as I mentioned earlier, different methods.

00:14:50 ◼   ► How much you can pay per tap, of course, depends on a lot of things.

00:14:53 ◼   ► What is your app cost or how do you make money?

00:14:56 ◼   ► What is the average amount of money that you make per new user?

00:15:01 ◼   ► And of course then, like, you know, how do you translate between the number of taps on

00:15:06 ◼   ► your App Store page or your ad and how many people actually install the app and make you

00:15:12 ◼   ► money?

00:15:14 ◼   ► So this is obviously easiest for paid apps, paid up front apps, where you know that every

00:15:19 ◼   ► installation of the app will get you X amount of money.

00:15:23 ◼   ► Don't forget Apple's commission.

00:15:24 ◼   ► You know that'll get you X amount of money.

00:15:27 ◼   ► And then you just have to then figure out how many views on my App Store page does it

00:15:31 ◼   ► usually take to make one sale?

00:15:33 ◼   ► And this is very easy to find in iTunes Connect Analytics.

00:15:38 ◼   ► There's a bunch of ways to do this and people have found out in the various graphs and stuff,

00:15:41 ◼   ► so we'll link that in the show notes, there's a good blog post about it.

00:15:45 ◼   ► Basically paid apps is fairly easy.

00:15:47 ◼   ► If your app is not paid up front, you have to figure out basically what is the average

00:15:51 ◼   ► amount of money you stand to make from somebody who installs your app.

00:15:55 ◼   ► And that is not necessarily straightforward, depending on how you make your money.

00:15:59 ◼   ► It is certainly doable.

00:16:00 ◼   ► And you probably have better ways to do it than I do, don't you?

00:16:02 ◼   ► Sure.

00:16:03 ◼   ► I mean, this is probably one of the harder things that I've been trying to work through

00:16:06 ◼   ► recently is, especially for a lot of my apps that make their money from advertising.

00:16:12 ◼   ► So it's this big fantastic circle of advertising.

00:16:16 ◼   ► I use advertising to get someone to download the app, to show them ads, to give me money

00:16:20 ◼   ► so that I can buy more ads, and the cycle continues.

00:16:23 ◼   ► But for them, it's much more complicated because, yes, there's no upfront one-time

00:16:28 ◼   ► purchase.

00:16:29 ◼   ► It's that person who, you know, I'm paying for a tap.

00:16:33 ◼   ► A certain number of people who tap will then install the app.

00:16:37 ◼   ► They will then use the app for a particular number of, you know, amount of time, which

00:16:42 ◼   ► is, if you're looking at your analytics, you're looking for something called retention,

00:16:46 ◼   ► which is showing you, you know, roughly what percentage of users will continue to use your

00:16:52 ◼   ► app after a particular amount of time.

00:16:54 ◼   ► So if you had, say, a 30% retention after 30 days, that means 30 days after someone

00:17:00 ◼   ► downloads it, there's a good chance that they're continuing to use it.

00:17:03 ◼   ► So you can kind of get a sense of how often they'll use it.

00:17:06 ◼   ► Then you have to work out how many sessions they typically do per day, of those sessions,

00:17:11 ◼   ► how many impressions you're showing on your ad network, and then you work out back from

00:17:15 ◼   ► there, how much revenue you get per impression, and so on.

00:17:18 ◼   ► And so it's much more inaccurate.

00:17:21 ◼   ► And I've been trying as best I could over the last couple weeks as search ads became

00:17:27 ◼   ► a thing to try and really get a good number for my apps, but at this point, I just kind

00:17:30 ◼   ► of have a vague estimate of like, it costs, I get maybe this much per user.

00:17:36 ◼   ► And I'm just kind of basing my advertising on that, because I think it's also probably

00:17:40 ◼   ► worth pointing out is, while it's the most straightforward way to price this is just

00:17:44 ◼   ► in the sense of, you know, if I pay a penny less than I make from that user for the ad,

00:17:51 ◼   ► then I'm making money.

00:17:53 ◼   ► But you could also just view it as a marketing expense, that certain kinds of marketing,

00:17:58 ◼   ► you're just trying to get people interested in your application and exposed to it.

00:18:02 ◼   ► And kind of it's more, I guess, what you'd call brand advertising, that you're, I'm

00:18:07 ◼   ► like, well, we can worry less about it.

00:18:09 ◼   ► And certainly some of my experience early on, that's kind of what I'm doing.

00:18:13 ◼   ► I'm just kind of curious to see how, you know, what it costs to get users and thinking

00:18:18 ◼   ► in some ways that, you know, having my app in more people's hands will have a bigger

00:18:24 ◼   ► impact down the road than than not.

00:18:26 ◼   ► And it may not necessarily match up one to one in terms of, you know, I paid 25 cents,

00:18:32 ◼   ► I made 26 cents, so I'm good.

00:18:35 ◼   ► It may be that I'm overpaying by, you know, 10 cents a user, which isn't sustainable,

00:18:41 ◼   ► necessarily in a direct sense.

00:18:43 ◼   ► But it may be if that those extra downloads are broadly helping your app from an exposure

00:18:50 ◼   ► perspective.

00:18:51 ◼   ► So it's definitely a really tricky thing to work through.

00:18:54 ◼   ► But, you know, you just kind of have to sit down in your analytics, whether that's something

00:18:58 ◼   ► like Fabric that you're using, which is what I use, and I think what you use is for iTunes

00:19:03 ◼   ► Connect.

00:19:04 ◼   ► Analytics can do a lot of this for you as well.

00:19:06 ◼   ► And you just kind of have to sit and take the numbers, put it into Excel, and do some

00:19:10 ◼   ► crunching to see what makes sense for you.

00:19:12 ◼   ► - Yeah, you know, another thing to think about is like how, what percentage of your new users

00:19:16 ◼   ► come through clicking ads.

00:19:17 ◼   ► Because like, you know, if you're thinking that like you make 25 cents per user, but,

00:19:24 ◼   ► you know, 10% of users come from clicking ads and the rest come from other ways, then

00:19:28 ◼   ► like you actually might be able to bid a lot more than what that is to get those users.

00:19:33 ◼   ► And again, it depends on like what are your priorities?

00:19:35 ◼   ► Are your priorities to get more users, to spread it wider, and then, you know, to maybe

00:19:39 ◼   ► reap the rewards of that down the road with just a wider, bigger user base and word of

00:19:42 ◼   ► mouth marketing?

00:19:43 ◼   ► Or, you know, do you really need to care about like absolutely minimizing cost of acquiring

00:19:48 ◼   ► these users to begin with?

00:19:49 ◼   ► And there's, every app will be different in this way.

00:19:52 ◼   ► What, you know, your needs, your priorities, these will all be different.

00:19:54 ◼   ► And it really depends a lot on your app and how much you stand to make per user, really.

00:19:59 ◼   ► And this is actually one thing that I think, this is actually helpful in this new environment

00:20:03 ◼   ► because I think this will make people think about their business models a little bit more

00:20:07 ◼   ► and maybe charge more money and charge higher prices for apps that really, that can earn

00:20:12 ◼   ► it, that deserve the higher prices.

00:20:14 ◼   ► So I think this actually might help raise app store prices as people figure out, you

00:20:18 ◼   ► know, it would be really a lot better if I could bid on these keywords and be a little

00:20:22 ◼   ► more competitive on the ad side.

00:20:24 ◼   ► But in order to do that, I have to charge a real price for my app or I have to have

00:20:27 ◼   ► some kind of recurring revenue scheme or something like that.

00:20:30 ◼   ► So ultimately, I think this might actually help app pricing substantially.

00:20:32 ◼   ► Or at the very least, it'll help, I think it's definitely been a constructive exercise

00:20:37 ◼   ► for myself to have to try and put a dollar amount on each user.

00:20:43 ◼   ► Which for someone who loves numbers as much as I do is something that I've never really

00:20:46 ◼   ► done.

00:20:48 ◼   ► And so it's definitely been a constructive thing to, forcing you to think down, sit down

00:20:53 ◼   ► and actually be like, "Okay, what is a customer worth to me?"

00:20:57 ◼   ► And to put that into a number because even beyond advertising, that's a very useful

00:21:01 ◼   ► and important thing I think to understand.

00:21:03 ◼   ► Because even when you're thinking about things like customer support or things like

00:21:08 ◼   ► other support expenses or server hosting or things where you, if you can put a number

00:21:14 ◼   ► on what a user is worth monetarily to you, then you can probably make more informed decisions

00:21:19 ◼   ► about the other things that are involved and that are costs for running an app.

00:21:23 ◼   ► Yeah.

00:21:24 ◼   ► All right.

00:21:25 ◼   ► And then I figured we spent our last few minutes talking about keywords.

00:21:28 ◼   ► You know, what keywords do you bid on?

00:21:30 ◼   ► How, you know, what do you buy?

00:21:31 ◼   ► What do you bid against?

00:21:33 ◼   ► Apple's implementation here is a little bit restrictive in that they even mentioned this

00:21:38 ◼   ► during the introduction of this, that if Apple does not deem the keywords that are being

00:21:44 ◼   ► searched for relevant to your app and that's relevant by whatever internal standards they're

00:21:49 ◼   ► using, that's kind of a black box to us.

00:21:51 ◼   ► But basically if Apple does not deem keywords relevant to your app, your ad will not be

00:21:55 ◼   ► shown against those keywords no matter what you're willing to bid on it, which is interesting.

00:21:59 ◼   ► For example, like one of the things I decided to bid on in Overcast's ad campaign was some

00:22:05 ◼   ► terms related to the word radio because podcasts are kind of like listening to the radio and

00:22:10 ◼   ► so I want to kind of get those people too.

00:22:13 ◼   ► And all of those, if you look at the reports, those all have zero impressions.

00:22:16 ◼   ► And so it seems obvious that Apple does not deem the word radio relevant to my app.

00:22:22 ◼   ► And so even if I'm willing to pay, that's, I can't get those keywords.

00:22:26 ◼   ► And this, so this is actually, this is probably a good thing.

00:22:30 ◼   ► So what it means is like I couldn't bid against something like Twitter or Instagram for Overcast

00:22:35 ◼   ► to try to cash in on big search terms that aren't actually relevant to my app at all.

00:22:39 ◼   ► But also that means that all of us small indie developers, we can't all be outbid in every

00:22:44 ◼   ► single category by things like Clash of Clans and like casinos, like apps that make tons

00:22:49 ◼   ► of money per user to the point where they're willing to spend whatever it takes to even

00:22:52 ◼   ► get users who are searching for podcast apps because they don't care.

00:22:55 ◼   ► It's a user is a user to them and they make so much money they can do that.

00:22:58 ◼   ► So this basically makes that impossible.

00:23:01 ◼   ► And it kind of gives people a more fair chance of their ads being shown in categories that

00:23:06 ◼   ► are not that hotly contested for things like high profit games.

00:23:10 ◼   ► If you actually make a game, well, that might be harder.

00:23:13 ◼   ► But I'm sorry about that.

00:23:14 ◼   ► I don't know anything about games.

00:23:15 ◼   ► - Everything's harder for you anyway though.

00:23:17 ◼   ► - That's actually, yes, that is generally true.

00:23:20 ◼   ► Your upside is generally higher, but it's harder to get it.

00:23:24 ◼   ► Anyway, there's also this big question about whether to bid on your competitors' app names.

00:23:31 ◼   ► And we've had some discussions on Twitter here and there about this.

00:23:33 ◼   ► But my position on whether to bid on competitors' names is yes, you should do it and that's

00:23:39 ◼   ► just part of the game.

00:23:40 ◼   ► And your competitors are gonna bid on your name too and that's just part of the system.

00:23:43 ◼   ► And in general, not only should this be considered a necessary side of this, but I wouldn't even

00:23:49 ◼   ► call it a necessary evil.

00:23:51 ◼   ► I'd call it just a feature of the system because you're thinking, you know, if you

00:23:54 ◼   ► are offended by the idea of competitors bidding on you, you're probably thinking of bigger

00:23:59 ◼   ► competitors bidding on your app's name.

00:24:01 ◼   ► But if you think about it the other way, you can bid on bigger apps' names.

00:24:06 ◼   ► And that is more powerful 'cause then you think like, you know, like one of the biggest

00:24:09 ◼   ► podcast apps out there is Stitcher, right?

00:24:12 ◼   ► And I bid on Stitcher's name.

00:24:14 ◼   ► And I've gotten click-throughs and installs based on that.

00:24:16 ◼   ► Because even if somebody's not searching for Overcast, it's relevant.

00:24:20 ◼   ► It's a perfectly valid alternative.

00:24:22 ◼   ► In my opinion, it's a lot better alternative, obviously.

00:24:25 ◼   ► And so I can get users that are searching for my competitors' apps who are bigger than

00:24:30 ◼   ► me.

00:24:31 ◼   ► And that is a very kind of freeing opportunity that I have.

00:24:35 ◼   ► That's a good opportunity to take advantage of.

00:24:36 ◼   ► So if you think about it in that direction, I think it makes a lot of sense why they allow

00:24:41 ◼   ► that.

00:24:42 ◼   ► And that's just part of, like all advertising kind of works that way.

00:24:44 ◼   ► I think that's part of the game and I think that's fair game.

00:24:47 ◼   ► And if you decide that you don't find that ethical, that's fine.

00:24:51 ◼   ► You don't have to do it.

00:24:53 ◼   ► But I think standard practice is going to be almost everyone's going to do that.

00:24:58 ◼   ► So if you don't do it, you're probably going to miss out on some pretty good sales opportunities

00:25:04 ◼   ► there.

00:25:05 ◼   ► Sure.

00:25:06 ◼   ► I mean, it's also probably worth saying that the way Apple's system works, and this is

00:25:10 ◼   ► actually to your point about relevancy, if you're curious what Apple thinks is relevant

00:25:14 ◼   ► to your application, the easiest way to do it once you have been running a campaign for

00:25:18 ◼   ► a little while is to just go into the sort of, if you tap down a little bit into your

00:25:23 ◼   ► campaign, you'll get the breakdown of what your impressions are by keyword.

00:25:28 ◼   ► And many of those keywords won't be things that you put in.

00:25:32 ◼   ► They'll just be terms that Apple thinks are relevant.

00:25:34 ◼   ► And so at a high level, like in my mind, if it's on one of those, if it's in that list

00:25:39 ◼   ► that Apple is doing their automatic matching with, then that's probably roughly the universe

00:25:47 ◼   ► of what Apple thinks is relevant to me.

00:25:50 ◼   ► So if you're kind of curious what that relevancy is.

00:25:52 ◼   ► And the reality is, in that list, with me putting nothing into it, I'm seeing the names

00:25:57 ◼   ► of my competitors' apps, because Apple knows that they're very relevant.

00:26:02 ◼   ► Like, in many ways, the most relevant results are when someone is very specifically looking

00:26:07 ◼   ► for an application that is very similar to yours.

00:26:11 ◼   ► And I think, like you said, that is just the nature of the App Store, is that it's very

00:26:15 ◼   ► competitive, it's very...

00:26:19 ◼   ► Cutthroat's the wrong word, but that's the reality, is that we're competing for a very

00:26:23 ◼   ► limited number of users' attention.

00:26:26 ◼   ► And so if it's not doing it, then just don't buy ads, and don't go down into this road,

00:26:35 ◼   ► because the nature of what we're doing here is we're just paying money to pull the attention

00:26:41 ◼   ► away from something else.

00:26:42 ◼   ► Because whatever was going to be the organic first hit there is what we are now pulling

00:26:47 ◼   ► money away from by buying it.

00:26:49 ◼   ► And that's maybe kind of weird, but that's the reality.

00:26:52 ◼   ► That's the system that Apple's building.

00:26:53 ◼   ► And if this is the marketplace in which we want to work and operate, then I think taking

00:26:57 ◼   ► full advantage of that as best we can is sort of the responsible, appropriate thing for

00:27:02 ◼   ► us to do.

00:27:03 ◼   ► Yeah, exactly.

00:27:05 ◼   ► And I would say, like, the biggest takeaway I have is, you know, you might have some idea

00:27:10 ◼   ► of what you can pay, what things will cost, how effective ads will be, but nothing beats

00:27:15 ◼   ► actually trying it.

00:27:17 ◼   ► And Apple made it this really easy on us because they sent everybody a $100 promo credit.

00:27:21 ◼   ► And I don't know if all new accounts will get that or if only the existing dev accounts

00:27:25 ◼   ► got it last week, but the $100 promo credit is awesome because you just get $100 worth

00:27:30 ◼   ► of free advertising, and that can be your cap, and that can be it.

00:27:32 ◼   ► So you can literally get free ads and then learn the data from those ads.

00:27:37 ◼   ► You can learn what keywords are working.

00:27:38 ◼   ► You can learn what your average cost per tab or your average cost per installation ends

00:27:43 ◼   ► up being, and that can further inform what you do.

00:27:46 ◼   ► If you don't get the free promo credit or if you want to go past that, you can actually

00:27:49 ◼   ► learn a lot with not that much money, relatively speaking, to the cost of computers and developer

00:27:54 ◼   ► accounts and developing apps and stuff.

00:27:56 ◼   ► Like, if you want to put in 50 bucks, 100 bucks, that seems like a lot of money to a

00:28:00 ◼   ► lot of people, but if you put that in there, you will get so much data out and you will

00:28:05 ◼   ► find out really what these things do for you, what they cost.

00:28:09 ◼   ► And that's true of all advertising.

00:28:11 ◼   ► Nothing beats just trying it.

00:28:14 ◼   ► And a lot of times you won't learn.

00:28:16 ◼   ► You can theorize as much as you want.

00:28:18 ◼   ► You can run theoretical numbers, but you have to just try it.

00:28:22 ◼   ► And sometimes it doesn't work out, and that's kind of the risk you take by trying it.

00:28:25 ◼   ► But usually, if you can make enough money per user of your app to cover what these things

00:28:31 ◼   ► tend to cost, like my cost per tap is in the 20 cent range right now, and it's going

00:28:37 ◼   ► down as everyone's promo credits run out.

00:28:40 ◼   ► So to give you some idea of what you might be spending here, if you can figure out how

00:28:46 ◼   ► to make that work for your app, just try it and see what it does for you.

00:28:52 ◼   ► - This is now just part of the reality of working in the App Store.

00:28:56 ◼   ► And so you gotta try it, put some money into it, and understand that sometimes it's like

00:29:00 ◼   ► I put money into advertising and it kind of feels like I'm just throwing money away.

00:29:05 ◼   ► And in some ways, maybe that's the case if I'm not doing it right, but the reality's

00:29:09 ◼   ► just the cost of doing business.

00:29:10 ◼   ► And you owe it to yourself if you take your business seriously to at least try it, I think,

00:29:15 ◼   ► and understand it, rather than just discounting it out of hand.

00:29:19 ◼   ► - Exactly.

00:29:20 ◼   ► All right, well we're out of time this week.

00:29:22 ◼   ► Thank you everybody for listening, and we'll talk to you next week.

00:29:25 ◼   ► - Bye.

00:29:26 ◼   ► [BLANK_AUDIO]