Apple to Drive China Revenues with Search Ad Launch

Apple to Drive China Revenues with Search Ad Launch

Launched in the United States five years ago, Apple’s search advertising service has finally reached mainland China this week. A feature known as Apple Search Ads allows users to bid in an ad slot based on keyword searches in the App Store, similar to how Google search ads work. JPMorgan previously estimated that the giant’s annual advertising revenue could reach 11 billion by 2025, although there is no breakdown for the forecast search advertising business.

Apple itself relies on personalized advertising, allowing users to stop data tracking by the app, a move that will inevitably spread the business models of Facebook and others that rely on third-party data targeting ads. China historically has been a strong market for Apple, but with the rise of local offerings like the Huawei on the iPhone, the country is gradually losing its luster as a status symbol. The first quarter, however, saw a comeback thanks to Huawei’s slippery sales and the introduction of the iPhone 12 family through Apple’s smartphone shipments. The Chinese App Store is another important source of revenue for Apple.

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Apple to Drive China Revenues with Search Ad Launch

In the five-page guideline, Apple outlines qualifications for developers targeting Chinese users in mainland. Advertisers must have a stack of industry-based licenses that essentially exclude most foreign entities from direct Chinese advertising, as mentioned in a blog post by Apinchina, a company that helps launch international applications in China.

In order to bid for search ads in China, applications need to look for local partners with all government approval in place. For example, the requirement for applications to import goods into China includes not only a general license to conduct valuable connected Internet business, but also registration with the relevant trade and customs authorities.

Apple may even start seeking these permissions from applications it wants to publish in China, Apinchina writes, adding that Apple continues to enforce rules set by the Chinese government on gaming applications that have been proven from its crackdown. Apple may even start seeking these permissions from applications it wants to publish in China, Apinchina writes, adding that Apple continues to enforce rules set by the Chinese government on gaming applications that have been proven from its crackdown.

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