Apple Search Ads: Strategies for Managing Cannibalization and Competition

In the last couple of years, Apple Search Ads has fast become a game-changer for apps looking to maximize their visibility and reach in the App Store. In this exclusive interview, I sat down with Simon Thillay, Head of ASO at AppTweak, where we uncovered some brass-tack concepts for measuring the actual incrementality of Apple Search Ads. Simon shares some valuable insights on how App Store developers can effectively measure the outcome of Apple Search Ads.

 — Adam Landis, Head of Growth at Branch

Simon, we appreciate you sitting down with us today. Can you share a little about AppTweak and your role in the company?

Absolutely. AppTweak is an App Store Acquisition platform, which offers marketers a large variety of data points and insights to grow their apps and games in the App Store and Google Play. Concretely, this covers a wide variety of features in a self-service tool, going from app store optimization (ASO) intelligence with many functionalities for keywords and creatives optimization to a review management tool or even a campaign manager for your Apple Search Ads (ASA). We’ve even added a Reporting Studio, where you can correlate and compare your organic and paid user acquisition (UA) efforts by mixing data from AppTweak, store consoles, and mobile measurement partners (MMPs).

As for myself, I’m head of App Store Optimization at AppTweak, a unique role that pushes me to not only work with our team of App Growth Consultants to deliver services for our clients, but also to continuously research, ideate, and share on how to improve growth strategies with every new thing that Apple and Google release for their respective stores. That can, of course, be quite challenging, but it’s also extremely gratifying as I get to work alongside almost every team at AppTweak — from marketing and product to data science. As a result, we come up with meaningful insights, such as our model for calculating the cost of cannibalization in Apple Search Ads.

Apple Search Ads is one of the fastest-growing media channels in the mobile app market. Can you give us some background on this channel? Why is it growing so fast, and, in your opinion, how much of that is related to App Tracking Transparency (ATT)?

So, Apple Search Ads was launched back in 2017, initially just for the U.S. and U.K. Apple has progressively added more countries to the service, though we’re still missing a few important ones in my opinion. Revenue-wise, I’m not too familiar with the numbers, but I believe it was growing regularly up until COVID. The lockdown led to the first surge in the number of searches on the App Store, followed somewhat later by the release of iOS 14.5 and ATT, which gave Apple Search Ads another big boost.

That’s because Apple rules the App Store and Apple Search Ads are a first-party service. So, Apple doesn’t ask for the user’s consent to collect data about what they do in the store. This means the moment a user opens your app is the moment they need to consent, which increases the amount of deterministic data you can collect to optimize your campaigns compared to other ad networks.

Privacy-wise, it’s important to acknowledge that Apple does not use personalized targeting for Apple Search Ads unless users opt-in, which is the case for about 22% of them. But even so, the quality of data compared to other ad networks is much better. This has led to increased adoption of Apple Search Ads, which I recently heard from Thomas Petit is nearly 10% of ad spend for mobile apps and games.

What are some of the benefits of Apple Search Ads? And what are some of the biggest drawbacks?

I’d say there are three key benefits of Apple Search Ads:

  1. The quality of data, as mentioned already.
  2. The massive reach and qualitative traffic you can access with Apple Search Ads. According to a recent report Apple had to share, almost 375 million weekly active users engage in search on the App Store. That’s a massive user base, and the fact they are on the App Store also suggests they’re already in the mood for downloading an app, so there will be much less friction than with many other networks.
  3. Last, but not least, it’s the network that synergizes best with ASO. Basically, your bids are more likely to win the auction if Apple deems your app is relevant for the keyword you want to target, which can be greatly improved thanks to ASO. At the same time, Apple Search Ads can deliver additional insights for your keyword optimization strategy and, occasionally, a good boost to have the store algorithm rank you higher — though it’s not automatic.

In terms of drawbacks, I’d say it’s probably more time-consuming to advertise with Apple Search Ads than with some of the other networks. It can seem costlier (although I think that’s debatable), and a lot of people say it’s harder to scale with Apple Search Ads.

For that last one, I believe it’s partially true since you can’t force more people to search for a particular term just by increasing your budget. However, given the number of overall searches every day on the App Store, I think that the logic to scale with search by constantly testing new keywords combined with the competitiveness of the auctions makes it a more complicated channel compared to others that are more similar to one another.

The biggest complaint we’ve heard about Apple Search Ads is budget cannibalization. Can you tell us briefly why this is a complaint and how would you recommend that marketers approach — and price — the concept of cannibalization?

Organic search cannibalization in Apple Search Ads varies depending on how much better your ad would convert search traffic for a keyword for which your app ranks #1 compared to how well your competitors would.

ASA budget cannibalization is a term used to describe the wasted ad budget used to spend buying a keyword — or search — that the user would have found organically. For instance, if a user searches “Candy Crush” and would’ve downloaded the app organically, but instead clicks on a paid ad by Candy Crush, that budget is considered to have cannibalized your organic search efforts.

Also of note is competitive cannibalism, where a competitor snipes your organic traffic for their own download. In the example above, if the user’s search of “Candy Crush” drives a click and install on a paid ASA ad for a competitor, that would be cannibalizing your organic traffic.

In both cases, you need to measure the efficacy of ASA (cannibalized or competitive) in driving incremental installs for your brand.

For cannibalized budget, your goal is to measure the incremental change in downloads when starting or stopping a campaign, this will give you the number of installs your campaign is “cannibalizing” — or the installs that would’ve happened anyway. This can be especially potent when it comes to brand defense campaigns, where it’s reasonable to assume that competitors won’t be as good as you when it comes to converting people searching for your brand name.

Another method is if you’re able to estimate (even roughly) competitors’ conversion rates on your chosen keyword. You can actually come up with a number of installs your campaign is “protecting,” or the installs competitors would convert, if you release the Apple Search Ads impressions your campaign drives.

After that, some simple math gives you a current estimated cost per protected install (estimated amount of protected installs divided by campaign spend), which you can compare to the costs of other Apple Search Ads campaigns or potentially even campaigns on other networks.

The point of this operation is to get past the cannibalization dilemma: when it comes to brand defense especially, it’s very easy to think cannibalization is unavoidable and you either play or you don’t. But, in fact, if you make the effort to quantify it, you can bid smarter by knowing when it’s worth the cost and when you have better opportunities.

You mention “brand defense,” so what is the best strategy to defend against competitors stealing your customers with paid ads?

The first thing is to identify the competitors who are going after your defended keywords in Apple Search Ads. This is where AppTweak can help. A feature in our platform literally stores every search ad, so we detect every time we search for a keyword and can tell you the identity of other bidders.

From there on, there doesn’t exist a perfect algorithm to predict the conversion rate of each of those apps, but I recommend looking at a few data points that can help you come up with an estimated range for their respective conversion rates:

  • The first data point you can consider is your organic search results. It’s widely accepted in the ASO community that top positions in search results are essentially determined by which apps have the best conversion rate for the search query they match. That means that if you rank #1 organically, you should assume you have the best conversion rate. Furthermore, if multiple competitors rank closely, you can start making hypotheses as to how they stack against each other.
  • The second data point I recommend looking at is your own conversion rate in Apple Search Ads. In the example of brand defense campaigns, they give you the maximum value any competitor may approach. Additionally, if you are yourself bidding on competitors’ brand terms, your conversion rates on these can help serve as an anchor for the hypotheses you’ll make regarding how well competitors convert for your own brand.
  • My favorite data point is an indicator AppTweak’s data science team has developed, which is the Relevancy Score. It’s calculated based on the map we’ve drawn of the App Store according to all the keywords and all the apps we track, and reflects how close a keyword and an app may be based on all the search rankings in our database.

Then for budget planning, once I’ve looked at these data points for each app attacking my keywords, I formulate a few conversion rate hypotheses that help me calculate a range for my cost per protected install.

Are there any other ways to estimate the actual impact your Apple Search Ads campaign drives? 

Yes, technically you can have a better idea if you run an incrementality test. This requires pausing your campaign for at least one week to judge the impact over time. I recommend getting the help of a data scientist for this kind of test, but it’s very helpful especially if you aren’t too confident in your hypotheses.

With these tests, what you need to do is calculate one forecast for how many total search installs (organic + paid) your app should be receiving if the campaigns were to continue as usual, and one forecast for how many search installs you should receive if the stop of the campaign meant a pure drop in installs.

After that, you simply have to compare the observed results for both forecasts to deduce the cannibalization/incremental rate. You can get, once more, to the cost per protected install to arbitrate whether you want to restart your Apple Search Ads campaigns, or not.

The one caveat in this hypothesis is that your observed results are based on which apps were bidding on your defended keywords that week; so, the cost per protected install may not apply to future weeks if more threatening competitors start attacking your keywords.

The interactions between organic and paid search can be confusing. Should they be viewed – and treated – completely separately? Or is there a benefit in combining both strategies?

Actually, not many people know that there are marked benefits in running combined ASO and ASA strategies that will actually increase effectiveness.

It’s true, for instance, that getting downloads from a particular keyword with Apple Search Ads can help improve your organic ranking for that keyword. It’s not an automatic mechanism, but using ASA can be a way to get a “jumpstart,” as you can establish your app’s relevancy in the eyes of the App Store algorithm.

Even more importantly, Apple Search Ads can help you paint the picture of what happens after a user installs from a particular keyword. If you’re hesitating between two different benefits to focus on with ASO, getting post-install measurement — thanks to Apple Search Ads and data — you’ll find your MMP can really help with your decision.

Finally, Apple Search Ads allow you to use custom product pages in search results, which you can’t do for organic results, unfortunately. That can mean considerable uplifts in your app’s conversion rate for specific keywords because now you can highlight more niche features for consumers who wouldn’t necessarily think of your app being relevant to their search otherwise.

There are also benefits ASO brings to Apple Search Ads. For instance, your app will be expected to be more relevant for keywords you target in your metadata, which will get you better chances in Apple Search Ads auctions. That’s why an analogy I like to use is that you can consider ASO to be the feet on which your UA efforts stand, while ASA are “running shoes” that will help get you going faster.


Image of the Synergy between ASA & ASO Custom Product Pages: Improve conversion rates by offering a consistent experience in the user acquisition journey. Leads to... Keyword Strategy: Integrate keywords with high volume and good CVR in metadata. Leads to... Increasing Visibility: Higher visibility for certain keywords. Additional downloads leading to an improved ranking. Leads back to... Custom Product Pages.

Source: Advanced App Store Optimization book (2022)


Do you have a recommended budget allocation for Apple Search Ads? Does this change by industry?

I know everyone wishes there would be a silver bullet for these topics, but unfortunately, there’s no one-size-fits-all answer. In fact, the budget you should allocate not only depends on your industry, but also on your monetization type, alternative channels and, most importantly, your goals for Apple Search Ads. Since ASA are not subject to ATT unlike most other channels, they have a much higher value in terms of insights generation. For instance, it may be worth having higher costs per install if these also generate more learnings that can be applied to more marketing efforts.

What other things do app marketers need to keep in mind for Apple Search Ads?

Apple Search Ads is a channel that requires a few more resources than others when it comes to monitoring. Usually, you won’t have to produce as many creatives as with other channels, but with Apple Search Ads, you need to not only monitor your bids and performance but also regularly check the search terms your campaigns end up bidding on.

Even though you bid on keywords, Apple still is the ultimate judge for the search queries where your ads are going to appear. You can be surprised by which search terms get picked for your ads if you don’t keep an eye on campaigns. That’s especially true with broad match campaigns, but even exact match campaigns can offer some surprises. So you should frequently review search terms and add the ones that are irrelevant in the negative keywords of your campaign.

Reach out to learn more about how to maximize visibility and reach in the App Store.