Daily Insights

App Store: The Lay of the Land

By: Evan Bakker | May 19, 2019

Brands first and foremost need to market their apps properly to build a sizable user base. This can be achieved either through other popular apps, like social networks, or via the Apple App Store, where consumers actively seek apps to adopt.

Leading brands leverage App Store optimization through Search Ads, which appear at the top of search results. Within the iOS App Store, 65% of app downloads come directly from search, and these ads have a 50% conversion rate, according to Gartner L2’s mobile report. Yet despite the importance of getting in front of relevant audiences, only 70% of branded searches in the App Store over a two-week period in March yielded an ad of any kind.

The market is highly competitive, with 84% of ads tracing back to a brand other than the one that was searched. When ads are deployed, brands use the half-page ad format in 74% of cases, with the remaining 26% going to banner ads. Half-page ads are more effective because they give the advertiser greater real estate on the phone screen.

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Sectors’ App Store marketing approaches are determined by the competitiveness of the terms and the robustness of the advertisers. Sectors like hotels see low ad penetration, but the average competing advertiser boasts more than 600,000 app ratings, well over the average of 241,000. Big-box apps, meanwhile, don’t see the same level of head-to-head competition and instead vie for visibility along with many long-tail players.

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Restaurants tend to bid on direct competitors’ terms, given the high competition and commoditization of the sector, especially in subcategories like pizza. In the big-box sector, meanwhile, long-tail apps captured all of Bed Bath & Beyond’s potential paid visibility on its own branded term. One such app, Tophatter, an electronics and jewelry discounter boasting a 4.6 rating and 66th-place rank in the Shopping category, appeared in 20% of Bed Bath & Beyond results. Brands can also collaborate to bid on ads that are mutually beneficial. For example, big-box brand Meijer allowed its fulfillment provider, Shipt, to bid on its branded search term 100% of the time. Such a strategy can be a good idea, as it can potentially boost deliveries for both parties.