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Apple accused of buying ads for subscription-based apps for more commission, company responds

A report from Forbes has accused Apple of buying ads for subscription-based services so that it can mint money from the commission it makes on the on in-app purchases.
By Sanuj Bhatia November 16, 2021, 7:45 am
apple accused of buying ads for profit

Apple has been accused of buying ads for popular subscription-based third-party apps, such as HBO and Tinder, so that it can get more money from the commission it makes on the on in-app purchases, according to Forbes.

Forbes has reported that Apple has been buying Google ads subscription-based apps, such as HBO, Masterclass, Babbel, Tinder, Plenty of Fish, and Bumble, for over two years. The report says that Cupertino-giant does this to make more money as it (Apple) makes more money from the commissions it makes from the subscription-based apps. A marketer, in a statement to Forbes, has said that the tech giant "appears to be advertising for have been assertive about attempting to circumvent App Store policies."

It claims that the ads do not "disclose" that they're from Apple and take the user to the App Store without their consent. It takes the user to the App Store instead of the brand's sign-up website, Forbes has accused Apple. One source close to Forbes said:

Apple is trying [to] maximize the money they're making by driving in-app purchases that people buy through the Apple Store. Apple has figured out that they can make more money off these developers if they push people to the App Store to purchase there versus a web flow.

Ads, if placed by the brand, would usually take the user to the page that would encourage him/her to sign up online instead of the App Store. For example, if you sign-up for YouTube Premium via the iPhone app, it charges you more (because Apple charges some commission from Google) than it would if you do via the company's website. The report has accused Apple that it takes users to the App Store so that it can charge 15% or 30% commission of the subscription's revenue.

In addition to buying ads for money-purpose, the report also accuses Apple of that the companies have to pay more for their ad slots due to this.

If Apple is buying ads for HBO Max in order to get HBO customers to buy the service in-app, that means HBO has to spend more than Apple to get the top spot and high visibility. That increases customer acquisition cost: a significant problem for high-growth companies that rely on sophisticated marketing models that balance cost of customer acquisition with funds available for advertising.

Apple Responds

apple defends its stance

After these allegations were put up by Forbes, Apple has defended its stance. The company says that the "developers are fully aware of the ads" it runs on their behalf. The company says that it promotes products that have been on its App Store for more than five years. The company says that it is "is no different" from retailers that run ads of the products that sell well. In fact, the company says that it is "granted conventional legal rights" to do so.

The company says that the ads it runs achieved over 70 billion impressions in 2020. It says that it featured over 130,000 apps from the App Store and said that it is currently "spending to support" over 100 apps by advertising them across platforms such as Google, Snapchat, YouTube, TikTok, and Twitter.

Lastly, the company continued to defend its mark by saying that it is "committed to providing developers" with the resources that they need to be successful on the App Store.

Via: MacRumors

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