Apple Search Ads (ASA) is an acquisition channel in Apple’s App Store that drives high Tap Through Rates (TTR) and app installs. Calculating an Apple Search Ads cost can vary depending on the app category and campaign targets. But, to get results from App Store search ads, developers should factor in App Store fees and choose either the Basic or Advanced platform. It’s also important for Apple App Store ads to align with App Store Optimization (ASO) since both disciplines depend on each other for success.
With lots to consider, we’ve laid out some key metrics and the average Apple Search Ads cost in this research paper. We’ve also included details on App Store fees and outlined averages for Cost Per Tap, Cost Per Acquisition, and some Cost Per Install benchmarks.
Through this research paper, you should pick up a better understanding of Apple app store ads displays. But you should also understand the best ways to invest in app store search ads. Apple app store fees link to ad revenue, CPI models, and ranking factors. And, along with the latest Cost Per Install benchmarks from SplitMetrics, we’ve included some Apple Search Ads best practices. We’ve also touched on the App Store charges that developers and app owners should budget for when they engage with App Store search ads.
Featured Apple Search Ads Platforms
Key data points
- Over 60% of apps use Apple App Store ads as an acquisition channel.
- Apple should expect to generate $5 billion in advertising revenue from Apple Search Ads in 2022 (CNBC).
- Apple Search Ads once offered an average conversion rate of 50%. But studies suggest App Store search ads increase conversion probability by 65.26%. (Munawar Chalil. T, Dony Dahana. W, Baumann. C, (2020)).
- Apple app store marketing offers 1.4x higher retention and 40% lower Cost-Per-Install rates than other platforms (searchads.apple.com).
- Apple prioritizes two main factors to determine ad ranking: keyword relevancy and the advertiser’s maximum CPT bid (Cornell University).
- The average CPT in the first half of 2022 was $1.56. Finance was one of the more expensive verticals with a CPT at $3.37. (SplitMetrics).
- The average Apple Search Ads Cost Per Acquisition was around $2.40 in 2022 (SplitMetrics).
- The average Tap Through Rate (TTR) was 9.99%. The Entertainment vertical scored the highest TTR at around 25% (SplitMetrics).
- Average conversion rates in the first half of 2022 were 64.96% (SplitMetrics).
- App Store fees include a 30% commission rate for transactions in the App Store and for in-app purchases, but not for free apps. (searchads.apple.com).
- For regular subscriptions and in-app purchases, the App Store charges 30% for the first year, reducing to 15% for every subsequent year. (searchads.apple.com).
- Apple’s program for small businesses offers a 15% commission rate on paid apps and in-app purchases (searchads.apple.com).
- The average Cost-Per-Tap (CPT) with Apple App Store Search Advanced is $1.56. (searchads.apple.com).
- 500 million visitors visit the App Store every week (developer.apple.com).
- Banner Ads are 120% more effective than video advertising for post-install engagement.
- Native ads offer benefits such as 60% higher engagement rates.
Apple Search Ads (ASA) definition
Apple Search Ads (ASA) is a type of PPC acquisition channel for Apple’s App Store. It uses a Cost-Per-Tap (CPT) model that allows publishers to only pay for ads that customers engage with. ASA has a close connection to App Store Optimization (ASO) since publishers must use App Store Connect to update app metadata and creative assets. ASA also functions as an auction system for publishers to bid on keywords to feature their ads. Successful Apple app store ads come down to a choice of formats:
- Search results: Publishers bid for specific keywords and run ads for them. When users put these words into the App Store search, ads appear at the top of search results.
- Search tab: Ads appear at the top of the suggested apps list on the Search tab.
- Today tab: The Today tab showcases creatives on the front page of the App Store.
- Product pages: These attract app users on relevant pages across the App Store. Ads appear at the top of the ‘Your Might Also Like’ list.
Emerging as an app marketing channel in 2016, over 60% of apps now use iOS app store ads. In return for paying App Store fees, developers and publishers have a choice of two campaign models–Basic and Advanced. They also get a choice of campaign types that can help with maximizing returns.
Sitting among stores like Microsoft, Samsung Galaxy, and Amazon App Store, the giants of Google Play and Apple App Store continue to dominate the market. Apple reaching 1.85B app installs in the last quarter of 2022 in the US App Store reflects this success. And financial analysts expect Apple to generate $5 billion in advertising revenue from Apple Search Ads in 2022. With such high revenues around, the total Apple Search Ads cost to publishers remains low.
App Store top markets by app installs 2022
Source: SensorTower
Benefits of investing in Apple Search Ads
So what are the benefits of Apple App Store advertising and why should publishers invest in it? We’ve outlined the key areas below:
Visibility
As a paid app marketing channel, Apple App Store ads get priority over organic search results. When users enter keywords into the search function, App Store Search ads will appear that are relevant to those keywords. And by using creatives and featured placements, app publishers get increased exposure and visibility, resulting in higher CTRs and conversions.
Conversion
Because search ads use a CPT model, App Store fees are low. For instance, average conversion rates for App Store marketing were traditionally 50%. But research by Munawar Chalil. T, Dony Dahana. W, Baumann. C, (2020) suggests search ads can increase conversion probability by over 65%. So, with over half of all prospective users installing apps from ASA, designing campaigns with keywords that your target audience use will help to boost conversions.
ROI
You can achieve higher ROIs by lowering your Apple Search Ads cost. For instance, Netmarbel turned to Apple App Store marketing to launch Marvel’s Future Revolution and gained 1.4x higher retention and 40% lower Cost-Per-Install rates. By combining Search results with Search tab ad placements, Netmarbel maximized downloads during launch week.
Engagement
Because users take to the Search bar to find the apps they want, engagement with App Store ads is generally high. Prospective users will be organic and, as a result, be more likely to use the app. You can also use Apple Search Ads Ad Groups as an Advanced feature to target groups. This enables you to show ads based on age, location, and device, and include a keyword theme, for example. Doing so often leads to better engagement and increased long-term value.
Simplicity
Apple App Store advertising is simple to set up and easy to navigate. You can run several keyword campaigns using daily maximum budgets for bidding. It’s a similar format to AdWords but instead, Apple suggests bid ranges based on other similar bids. This can help to check the amounts that other developers are bidding.
Apple Search Ads campaign strategies
An effective App Store search ads campaign relies on solid planning and campaign design. Putting the work into a campaign ahead of time helps to keep Apple Search Ads costs low while maximizing ROI. It also helps with measuring performance and planning for scaling up. We’ve outlined some of Apple Search Ads best practices and strategies that can help to run structured and effective campaigns:
Determine a campaign budget
Using an allocated monthly budget can boost the potential of Apple app store advertising and help with allocating App Store fees. By approximating how much Apple Search Ads cost every month, publishers can reduce the risks of under and overspending. Apple App Store ads also impose extendable Daily Caps on allocated spend.
Optimize your ad store listing (ASO)
Running successful App Store search ads relies on effective App Store Optimization (ASO). Getting your house in order on the App Store will help to keep your Apple Search Ads cost low since you’ll be making it easier for users to find your app in the first place. According to Apple, search results can include developers, in-app purchases and events, categories, tips and tricks, and collections. And apps will appear with the name, icon, and subtitle displayed.
Focus on keyword match types
Apple helps publishers to find the right keywords to match any type of advertising campaign. These come in two forms–Broad Match and Exact Match–along with a subcategory of Search Match:
- Exact Match: Apple matches search results to the specific keyword or keyphrase. Publishers enter the auction for a specific keyword and if they win the bid, their ad will show in the search for that keyword.
- Broad Match: Ads will appear on the search results but with other variants and associated words. These can include similar long-tail keywords, singular and plural versions, and synonyms.
- Search Match: Not a match type but instead a feature that helps to find new keywords by matching search queries with keywords in an app’s metadata.
ASOMobile sets these out in a chart, detailed below:
ASO Mobile Chart – Keywords for Apple Search Ads
| Match Type | Broad Match | Exact Match | Search Match |
|---|---|---|---|
| What forms of the word include correspondence | Keyword + misspellings, plurals, related words, synonyms, similar phrases and queries, translation into other languages | Keyword + major misspellings, plurals | Apple matches relevant keywords and search queries based on app metadata |
| Audience | Broad | Narrow | Broad |
| Metrics: Impressions, clicks, conversions | More impressions | Fewer impressions but higher click and conversion rates | More impressions |
| Which advertising campaign is suitable for? | Discovery, General | Brand and exact match bids for the selected keyword | Discovery |
Source: ASOMobile
Optimize your Apple ads bids strategy
ASA uses a second-price auction system where customers bid on relevant keywords they want to rank for. CPT depends on how much the nearest competitor is bidding on that keyword. Those with the highest bids can win ad placements and have their app ads given priority in the search.
According to a blog article by Cornell University, Apple prioritizes two main factors to determine how an ad ranks: keyword relevancy and the advertiser’s maximum CPT bid. And through its analytics features, Apple provides valuable insights and tips that can help to design strategic bids. Some insights may include recommendations for suggested bid ranges and bid strength.
Sample page of Apple’s bidding insights
Source: searchads.apple.com
Use scheduling and campaign duplicates
Ad scheduling allows publishers to schedule ads or ad groups in line with seasonal campaigns or time-sensitive offers. Apple allows advertisers to run many campaigns and duplicate successful campaigns and run them again. They also make it possible to bulk edit several CPT bids at the same time.
What do Apple Search Ads cost?
The most recent industry benchmarks from SplitMetrics can help us to answer how much Apple Search Ads cost. Through these benchmarks, we can distill Apple Search Ads cost per-install rates down to Cost-Per-Tap and Cost-Per-Acquisition. We can also break costs down into segments across each package, i.e. Basic and Advanced, starting with App Store fees.
We touched on CPT and CPA key metrics in our review of App Search Ads platforms. But let’s recap and share SplitMetric’s latest rates.
CPT – Cost Per Tap
CPT is the main cost metric for Apple Search Ads. It’s calculated by dividing the total spend by the number of times a user ‘taps’ onto an ad. Publishers only pay for each tap, making it cost-effective. Competitive bids drive the overall value of CPT which is why it’s important to put in place Apple Search Ads best practices and strategies to stay ahead.
SplitMetrics’ 2022 Benchmark report shows that the average CPT was $1.56 in the first half of 2022. Finance was one of the more expensive verticals with a CPT measured at $3.37. This is a massive drop from the previous year which was $11.73 following a boom for cryptocurrency.
SplitMetrics Benchmarks – Apple Search Ads CPT by Category 2022
Source: SplitMetrics
CPA – Cost Per Acquisition
CPA is an important metric for measuring the effectiveness of any iOS search ads and reflects the number of users who tap the ‘Get’ button to download their app. According to SplitMetrics benchmarking reports, the average Apple Search Ads Cost Per Acquisition was around $2.40. But this also varied across different categories outlined in the chart below:
SplitMetrics Benchmarks – Apple Search Ads CPA by Category 2022
Source: SplitMetrics
CPI – Cost Per Install
Understanding Cost-Per-Install benchmarks is easier when it’s looked at in relation to CPA rates. For instance, CPA may track the number of users who tap or click the ‘Get’ button but that doesn’t always equate to a neat measurement. Users won’t always follow through to getting a physical app installation and there are various reasons for this. For instance, through connectivity issues or users who don’t open apps post-installation. These differences can point towards a CPI value rather than the number of clicks as represented by a CPA.
For these reasons, businesses that engage with CPI can often take a customized approach that reflects their business model and the need for physical app installations.
TTR – Tap Through Rate
A Tap Through Rate emerged as a more in-depth estimation of an Apple Search Ads cost due to users avoiding paid ads and heading toward organic results instead. It’s measured by the number of times customers ‘tap’ an ad divided by the total number of impressions the ad received.
According to SplitMetrics, Tap Through Rates were very high in 2022. The Entertainment vertical scored a TTR of almost 25% and many others scored well over the average TTR of 9.99%.
SplitMetrics Benchmarks – Apple Search Ads TTR by Category 2022
Source: SplitMetrics
CR Benchmarks – Apple Search Ads Conversion Rates
Conversion Rates reveal the likelihood of a user tapping on the GET button after they’ve visited an app’s product page on the App Store. According to SplitMetrics, average conversion rates during the first half of 2022 were 64.96%. CR benchmarks reflect the importance of conducting strong efforts with App Store Optimization since much depends on a strong product page and App Store marketing.
SplitMetrics Benchmarks – Apple Search Ads CR by Category 2022
Source: SplitMetrics
App Store fees structure
Before embarking on an Apple Search Ads campaign, it’s worth noting the rate of App Store fees you may incur. Apple charges a 30% commission rate for transactions in the App Store and for in-app purchases, but this doesn’t apply to free apps. App Store fees for regular subscriptions and in-app purchases are charged at a rate of 30% for the first year, reducing to 15% for every subsequent year.
Apple also runs a dedicated program for small businesses earning up to $1,000,000. These entities are eligible for a lowered 15% commission rate on their paid apps and in-app purchases. But if they go over the $1M threshold during the year they’ll pay the standard 30% rate on future sales.
There are a few exceptions to the rule. App Store fees only apply to digital goods and services. Apple will also take a cut of any boosted social media posts. There’s also a different fee structure of 27% for any dating apps launched in the Netherlands.
Apple App Store – Commission Structure
| Characteristic | Commission Rate |
|---|---|
| Apple App Store (Standard) | 30% |
| Apple App Store (Subscriptions) | 30% |
| Apple App Store (Subscriptions - after subscriber first year) | 15% |
| Apple App Store (Small Business Program) | 15% |
| Apple App Store (Small Business Program - subscriptions) | 15% |
| Apple App Store (News Partner Program - subscriptions) | 15% |
| Apple App Store (News Partner Program - in-app subscriptions) | 15% |
| Apple App Store Netherlands (Dating apps) | 27% |
Source: Statista
Apple Search Ads Basic
With more knowledge of App Store fees, let’s ask what are the differences between the Basic and Advanced package when deciding how much Apple Search Ads cost. The first fundamental difference is that Apple Search Ads Basic operates via a CPI model. This means developers will only pay for the installs they receive. Apple Search Ads Basic is also designed for developers and is very easy to install and use. Some other key features to note include:
- Apple Search Ads Basic lets you run ads at the top of the search results page.
- You only pay for installs at a price you set.
- Automated and matches your ads up to potential interested users.
- No commitment to long-term use so developers can start or stop at any time.
- Access to a quick-view dashboard to review results and analytics.
- A minimum budget of $5k and a maximum budget of $10k – per app, per month.
- The ability to promote up to 50 apps at a time.
App Search Ads Basic: Pros and Cons
Apple Search Ads Advanced
Calculating the Advanced level of Apple Search Ads cost requires a different approach. Advanced is for developers, advertisers, or agencies, and lets users run different campaign types on a Cost-Per-Tap basis (CPT).
There are also some fundamental differences worth noting:
- Apple Search Ads Advanced offers a choice of ads on the ‘Today’ tab, the Search tab, in App Store search results, and across other app product pages.
- Pay only when a user taps an ad and up to a maximum price of your choosing.
- Choose keywords for audience targeting.
- Access detailed reporting of all key metrics.
- The average Cost Per Tap is $1.56.
- Unlimited monthly budget.
- Unlimited no. of apps to promote.
Advanced also allows you to run specific campaigns based on your strategic goals. To be eligible to run campaigns, apps must be available to download or pre-order in the App Stores within the desired promotional regions. Four types of Apple Search Ads campaigns help to promote apps in designated territories:
- Brand campaigns: Brand Campaigns target App store visitors and use Exact Match keywords to generate high TTR and CR rates.
- Category campaigns: Also known as Generic Campaigns, these use Exact Match and non-branded keywords to show ads to customers when they’re searching in the category section.
- Competitor campaigns: These campaigns are about snaring the visitors who search for your competition in the App Store using Exact Match keywords.
- Discovery campaigns: Discovery campaigns use both Search Match and Broad Match keywords to find new keywords and search terms relevant to your app. Words that appeal to a wider audience are more likely to yield higher impression rates.
App Search Ads Advanced: Pros and Cons
Apple Search Ads cost – Different ad formats
500 million visitors visit the App Store every week. To succeed in getting featured in the App Store, developers must focus on optimizing product pages as a part of App Store Optimization (ASO). When users see attractive app icons, preview graphics, screenshots, and keywords, this boosts ASO but also sets the scene for proper Apple App Store advertising.
With this in mind, calculating an Apple Search Ads cost should include a review of the types of in-app advertising you intend to run. UI design, UX, innovation, and uniqueness are all included as key criteria for getting featured in an App Store Ad. So, you’ll want to review the different ad formats first to consider the levels of investment to make in the creative you submit to the Apple Store. For instance, to get featured in the Today tab, you’ll need to follow App Store Promotional Artwork Guidelines if you’re selected.
Display advertising
Display advertising refers to ads that make it clear they’re ads. Users should understand that they’re looking at an ad and respond to it on this assumption. The Search tab, Today tab, and Games Tabs offer developers forms of Display Advertising. Different types of display advertising can include Banner Ads which are 120% more effective than video advertising for post-install engagement.
Example of Display Advertising in the App Store
Source: Apple Search Ads
Native advertising
Showing up within content and appearing less like advertising, Native ads offer many benefits including up to 60% higher engagement rates than display advertising. Native ads would apply to Search Ads and to ‘You Might Also Like’ ads that show up on Product Pages. These types of ads make it easier to install ads by hitting the ‘GET’ button. They can also include promoted in-app purchases appearing on product pages and in search results.
Example of Native Advertising in the form of In-App purchases
Source: Apple Search Ads
Location Assets
Adding location refinements such as maps or directions can also help to reduce spending any ad budget on searches outside of the target area. For example, a laundry service app working in the NYC area won’t want to show up in countries or territories outside of the app’s delivery area or proximity.
But also, adding maps and directions or various location assets should be something to factor into any Apple Search Ads cost.
Apple Search Ads services
Several specialist agencies offer help with Apple App Store marketing. Working with them can help to uncover areas to focus on to drive down your Apple Search Ads cost. In this section, we’ll highlight three types of services on offer and how they’ve worked in practice.
SplitMetrics
When they worked with RockBite Games, SplitMetrics agency increased organic installs from 1,240 a month to 1,880 between May and June in the US App Store. To do this, they tested a hypothesis that ASA could have a positive impact on organic installs when combined in a holistic approach with ASO marketing. Their hypothesis was correct, with further support for their theory coming from an expansion of relevant keywords from 26 to 112 in the top ten.
Screenshot of keywords ranking in the top ten for organic installs
Source: SplitMetrics
AppTweak
Apptweak is the proud owner of Atlas – the first ASO tool to offer enhancements to algorithms by capturing and using keyword semantics. Through Atlas, AppTweak now has an enhanced understanding of which keywords the App Store considers relevant for certain apps and groups of apps. They also understand the differences and interconnections between Apple Search Ads and ASO, which is important for maximizing traffic from specific keywords.
Apptweak’s diagram revealing the loop between Apple Search Ads and ASO
Source: redboxmobile.com
Using Atlas can help to understand user intent and is particularly helpful when it comes to comparing keywords across languages. With such strength in discovering semantic words, Atlas uses Natural Language Processing (NLP) and AI to automate keyword research and save you time.
Redbox
Redbox Mobile PLC is a dedicated Apple Search Ads partner that offers an automated Apple Search Ads Management Tool that speeds up optimization and setup while analyzing campaigns to find opportunities for scale. Named Astra, their tool offers a range of support for ASA advertising.
In their recent AdBites vodcast, Redbox CTO Samuel Chorlton and Head of Insights at data.ai Lexi Sydow discuss a common question of which CPT to set when engaging with Apple App Store advertising. Lexi Sydow explains how reviewing databases for specific keywords and industry trends can help to uncover the right benchmarks. They also suggest how this can differ between categories, giving CPT benchmarks for Fast Food at $2.01 for the US and $1.3 for the UK.
Redbox CTO Samuel Chorlton also explains the importance for agencies not to assume they’ll hit the average 50% conversion rate but to go in with an open mind. Some of their clients can get up to 80% but others may only achieve 30% conversion rates.
Final thoughts
Estimating an Apple Search Ads cost is easier using up-to-date and relevant Apple Search Ads cost per install benchmarks. With the average CPA at $2.40 and average conversion rates rising to around 65%, costs can remain reasonable. Bear in mind these account for averages across the board and don’t factor in variances between categories or verticals. So, developers and publishers must understand their target audiences and their app categories, and factor in App Store fees to calculate their Apple Search Ads cost.
Also, ASA and ASO are interdependent. So publishers should focus on developing creative Product Pages and advertising that attract their target audiences. Keyword research and placement are also of vital importance. And, with ASA offering the potential for high conversion rates and LTV, developers should consider the benefits of working with ASA agencies and ASA tools to optimize conversions. ASA is proving to be an exciting area for app user acquisition. And with low costs and higher ROI at hand, it’s something all app developers should plan for.