Google Play App Store To Offer Paid Placements To Aid Mobile App Discovery

Overview

Google has announced that they will be testing paid advertising placements within Google Play, their mobile application store.

Currently, app developers are given a set of best practices and app promotion tools using AdWords to gain visibility in Google Play. This new opportunity allows advertisers to bid on ads that match their search queries. The examples used in the press release show how typing in “hotel apps” or “coupon apps” now have an app listing in a highlighted paid space.

Testing of paid placements is currently available to brands already investing in Google’s online search offering, and will be rolled out on Android smartphones. The intention is to give new and smaller app developers an opportunity to gain visibility within the Google Play store by paying for it.

Google Play reaches more than 1 billion Android devices across 190 countries.

Over 1.3 millions apps available in the store.

March 2, 2015

What this means for you

Both the Apple and Google’s app stores are cluttered with applications that have limited visibility, and are very rarely downloaded and used, due to the sheer volume of apps. Existing opportunities to gain traction in either app store is incredibly difficult, especially for smaller developers. Previously, these developers had to bank on the hope that they get lucky, and an app is recognized by the app store’s editors, leading to positive reviews, showcasing, and, ideally, downloads.

While Google already offers advertisers the option of linking to app downloads in traditional search results, this advancement provides an opportunity to reach users who have a higher propensity to engage with these ads – users that are already in Google Play and are most likely looking to download a new app.

Future outlook

With the Google Play store now looking to integrate paid advertising opportunities based on search activity it will be really interesting to see the costs and results that these generate. The expectation would be that having an application listed at the top of a related search should see significantly increased download numbers. We will be watching to see how CPCs compare when advertising in traditional results vs. in Google Play. Of course, other efficiencies (i.e. conversion rates) will come into play as well, ultimately having a potential impact on the rate of adoption.

Despite this, consumers are incredibly selective over the applications that remain on their devices; thus evaluating the long term impact of advertising will be critical. While we anticipate that this news will drive visibility for a limited period of time, consumers will still be quick to remove an application if they no longer require it, potentially limiting the long-term benefit of the advertising investment.

Finally, in a similar vein to the highly competitive search market, we expect popular app categories (travel, gaming, etc.), to become quite expensive as brands look to maximize their visibility in these competitive app categories. Overtime this would make advertising in the Play store more challenging for small developers to generate the visibility they hope for.

For brands and marketers, this new offering provides an immediate solution to potential low app performance. Currently, opportunities have centered on investments in paid media app download campaigns to drive downloads. However, a significant amount of money would need to be invested over a long period of time to drive not only downloads, but also increased engagement, which is a core determining factor in an app’s placement within the App store charts.

Given the nature of Google’s business this was a logical next step in the progression of the application store, and for advertisers this provides a great way to drive traction and ultimately downloads of their applications.

In addition, the impact of the increasingly app-centric nature of consumers means that Google’s browser based business would be impacted overtime, and this provides and additional way for them to monetize their mobile operating system. In the last year, Google paid out over $7 billion to Android developers and they will be looking to bring more exclusive applications to the App Store as a way to compete with Apple.

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:

BAV PANCHAL

Partner, Mobile and Emerging Plaforms, N.A.

Bav.Panchal@mecglobal.com