Following increased efforts by Apple to improve iCloud, App Store Ads, and Apple Music services in recent years, Bernstein analyst Toni Sacconaghi says that App Store Ads are set to create $500 million in revenue this year, and possibly be a $2 Billion dollar business by 2020.
If you have visited the App Store recently, and you search for a specific app, you may have noticed at the top of the results feed there is a light-blue box with the word “Ad” next to it. Those are Apple Search Ads, and it’s a way for developers to purchase ad space on the app store to get their app to consumers. App Developers can buy specific keywords they want associating with their app and where it will be shown in the results feed.
According to Bernstein analyst Toni Sacconaghi, Apple is on track to near $2 billion dollars in Search Ad revenue by 2020. Sacconaghi does state that the number is conservative, though. But, Apple is set to increase total service revenue by the fourth-quarter of 2020 to $49 Billion.
According to CNBC, Apple has been working on improving their services like iCloud and Apple Music to lessen the blow of slowing iPhone sales in recent years.
Sacconaghi says that Apple may be able to increase the number of ad spots available on the results screen and also where they offer Search Ads. He does go on to state that “Search Ads are not yet offered in China, representing a huge opportunity for growth.”
Apple is set to hold their fourth-quarter earnings call on November 1st, 2018.