Apple’s new strategy of increasing revenue by expanding the virtual advertisement real estate of its App Store has backfired after developers responded vigorously to ads offering gambling services getting displayed next to their products.
Developers took to social media and filed complaints with the tech giant, informing the public that they were not happy their apps were getting associated with gambling activities without their consent. In response to the fuming reactions, Apple suspended ad placements for online casino apps.
The situation escalated very quickly. On 25th October, Apple announced its latest updates, which made it easier for advertisers to promote their apps in the App Store. The new feature allowed users to push their services in the Today tab and, more importantly, the section You Might Also Like, which sparked a backlash from other brands in the App Store.
Many developers were unhappy to see ads for mobile casinos displayed on the page for their proprietary app. Apple didn’t waste time, and the next day on 26th October, set a halt on the new marketing feature, effectively stopping the publication of gambling ads in the store for the time being.
Permanent Change or a Temporary Pause?
The company’s spokesman refused to clarify if this move is only a temporary pause or if it will exclude gambling ads permanently. At the same time, no time frame has been offered for the ‘pause’ – only that it’s currently in effect. So it’s not surprising that the vagueness of the company announcements has opened the floor for speculations.
However, industry experts believe Apple got blindsided by the developer’s reactions and is regrouping to formulate a new strategy for gambling ads without tarnishing its reputation.
As a trillion-dollar global corporate entity, Apple is always careful about how the public perceives it. And this is not the first time it retreated after pushback from its customers.
As the company attempts to navigate the new crisis, significant policy changes may follow in the upcoming days or months. Although, despite the criticism, the mobile casino ads are generating revenue for Apple, and that’s something the company is probably not willing to lose.
In the past, Apple implemented strict rules about advertising services and products it considered restricted, a category encompassing alcohol, pharmaceutical products, dating services, and gambling apps. However, the limitations imposed did not reflect the company’s sense of social responsibility. Rather they were in place because of legal frameworks that dictate where and how such ad types can be shown.
App Store Ads Have Been Controversial for Some Time
Industry insiders think it is highly unlike that the tech giant will give up on its effort to increase the monetization of its App store. There have been unconfirmed reports that Apple plans to offer ad space in their other services, such as Podcasts, Maps, and Books. In tandem with Apple TV, the corporation aims to double its advertisement revenue, which amounted to 3.7 billion dollars generated in 2021.
Some economists think the market can offer double-digit revenue by the decade’s end. Yet, the latest developments may postpone or modify those plans, considering some of the previously mentioned services are even more sensitive. Either way, the company is likely to stay on the profitable course.
Many developers fear that they may get forced to buy the ad space on their pages, to prevent similar future situations. Currently, developers can pay for the placement of ads on the App Store product pages and use targeting parameters. At the same time, a developer is powerless to stop an ad from appearing next to their app.
This is nothing new as ads have been a contentious issue for years. Since the store’s launch, brands have been able to promote products on competitors’ pages. This can undermine emerging developers’ chance to capture a market share and successfully offer their products.
Additionally, there has been growing dissatisfaction with the fact developers don’t receive any percentage of the App Store’s revenues from the ads appearing on their product page.
Conclusion
It remains to be seen what will be Apple’s long-term solution to this situation. The company has always had a liber attitude toward gambling apps and the profit made from the ads, so it’s hard to believe it will exclude gambling ads. Apart from the negative publicity generated, developers may not have much room to maneuver. Taking the apps down from the store can be detrimental to their business. However, it is Apple who owns the store and will ultimately decide how it functions.
