Google (NASDAQ:GOOG) on Thursday announced that it would allow developers to promote their apps on the Play Store. The ads are currently being tested as a “pilot” for a limited number of users.
The move is expected to further contribute to the company’s $50 billion revenue business from advertisers by promotion of products and services on search results. Google has displayed apps based on an algorithm based on the usage. With Android phones reaching more than one billion shipments, Google is set to a make use of the popularity of the platform.
“This is a very large and established market for mobile app marketing that Google has not had an attractive ad product for -until now,” said Mark May, Citigroup analyst.
The company mentioned that it has achieved hundreds of millions of app downloads by promotion through other methods. In 2014, Candy Crush Developer King.com spent more than $400 million on advertising and marketing and is one of the top games on Play Store and iOS App Store. Apple does not display ads in the App Store.
Facebook is already using a similar method of displaying sponsored apps for about $700 million smartphone users. Google has also acquired Toro, a startup that develops Facebook ads for apps. Google is expected to use the technology of the company to serve better ads. According to sources, Google VP of Play Store, Jamie Rosenberg wanted to improve user experience on the Store before including any sponsored apps.
The decision comes in the wake of lower revenue in Google search ad business as more people are using their apps to shot from the website. The search results ads also cost less while game developers will be willing to shell out for promotions. However, Apple still generates enough revenue from the App Store due to wealthier users and is not likely to bring in ads for the time being.[ Source ]