Traffic Arbitrage in Major Companies


What if I told you that the MAJOR CORPORATIONS (Apple in particular) are involved in TRAFFIC ARBITRAGE (no kidding)?! And not just any TRAFFIC ARBITRAGE, but MOBILE APPS TRAFFIC ARBITRAGE? 😀

What if I told you that the MAJOR CORPORATIONS (Apple in particular) are involved in TRAFFIC ARBITRAGE (no kidding)?! And not just any TRAFFIC ARBITRAGE, but MOBILE APPS TRAFFIC ARBITRAGE? 

Let’s take it point by point.

  1. Major companies promote their services, including mobile apps;
  2. Apple charges a 30% fee for all in-app purchases;
  3. To avoid paying a RevShare, services arrange subscription process on their website, for example, and broadcast the subscription status in-app like “this user has paid subscription, provide him with content”;
  4. This way, a user pays less, Apple loses revenue, and the brand can provide services at a lower price. A paradise that is.

The monopolist does not wish to lose money but kicking developers out of the store will not work. Therefore, the PUBLISHER ADAPTS. Recently, Apple has been running ads for the most popular AppStore apps in Google Ads.

Observe:

  • A user wants to watch a series from an iPad. He/she googles “Kinopoisk”;
  • He/she sees an ad for the Kinopoisk App in AppStore;
  • A user downloads the app and pays for the subscription in-app, rather than paying via “Yandex” services;
  • Apple gets its rightful 30% fee, and a new user to rebill.

The secret is that this ad was launched by Apple, not by Yandex. They know the economics of subscriptions and monetization best practices better than anyone else does. Therefore, to prevent the user from using a Web-to-App solution, the MONOPOLIST PUBLISHER is willing to pay for it himself.

Now for the moral aspects.

The brand obtains free installations and subscriptions and it’s a fact.

Brand app ads lead to the brand app and it’s a fact as well :). Google Ads-wise, the rules are not violated, and the specifics of the media allow you to run an app’s ad even if you are not the trademark owner. No rights are violated.

But! This approach (when a third party interferes with the marketing strategy of your product) can severely affect the project economics. You assess LTV, ARRPPU, plan the unit economy, and… suddenly Apple throws you a bunch of free virgin traffic. You can then toss your analytics out the window. Among other things, the brand has to squeeze out an Apple advertiser to run its ads at the top in SERP. This, too, might be challenging.

Of course, all those “but!” is a stupid, pathetic whimper. You can always reevaluate the economics. Also, free traffic with free subscriptions certainly can’t ruin it. And competing with ads of your product is idiotic. Just don’t, the traffic will be yours anyway.

USA media trends to fight corporations, so any headlines telling you about how Apple/Google/Facebook have screwed up are very much welcome by the public. But the fact is that dudes from the major corporations know how to do traffic arbitrage which is another plus in the bag for mobile apps. 

By the way, the media reporter, who investigated this issue, did not provide any hard evidence. Original source: https://www.forbes.com/sites/johnkoetsier/2021/11/12/apple-quietly-buying-ads-via-google-for-high-value-subscription-apps-to-capture-app-publisher-revenue/

Here’s a Copyright link if you don’t have a Forbes subscription and your reading limit has already expired: https://appleinsider.com/articles/21/11/12/apple-quietly-buying-app-ads-that-funnel-users-to-the-app-store-developers-claim


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