apple search ads

How to calculate Apple Search Ads cost breakdown for App Store advertising?

Apple Search Ads cost can get tricky to calculate and optimize. Learn about the factors influencing it, and how to navigate a ROAS positive strategy.

App marketers getting started on iOS advertising often wonder what the Apple Search Ads cost breakdown would be like. iOS advertising is known to be expensive, and therefore, it is quite understandable why iOS advertisers want to tread the Apple water carefully. In our latest article, we bring together all the types of pricing models available for Apple Search Ads, the key components that impact costs on iOS advertising, and how to plan up your Apple Search Ads budget. 

Why focus on the cost breakdown before getting started on the Apple Search Ads platform? 

Since Apple Search Ads is a keyword marketing-led platform, there’s a multiverse of keywords, ad placements, campaigns, keyword match types, and bid ranges. The success of the platform is in finding the right combination of all the components, that boost installs. Not focusing on Apple Search Ads cost breakdown, might cause you to overspend without seeing much ROI. 

Understanding Apple Search Ads cost

Apple Search Ads campaign cost can be classified broadly into three different pricing models. 

Cost-per-Tap (CPT): This indicates that a payment is made only when a user taps on the ad. If you are looking to boost brand awareness campaigns, and your focus is on top funnel metrics only - like impressions and taps - then this is a good pricing model to explore. 

Cost-per-Install (CPI): This indicates that the Apple Search Ads platform charges the advertiser based on the installs delivered by the platform. This is especially effective when advertisers are running mid-funnel campaigns like brand recall, category leadership, or even competitor campaigns. This is the way to go if only downloads are the priority. 

Cost-per-Converted-User (CPCU): Platforms like Newton that are integrated with MMPs, offer a third pricing model to explore. In this regard, the advertiser can choose an in-app event that they consider the most important metric for their ROAS or ROI goal. Only when a user crosses that step, does the advertiser have to make their payments. They can track impressions, taps, downloads, registrations, and all the steps leading to the selected in-app event. It can also be considered a Cost-per-Goal (CPG) model if you are looking to track multiple in-app goal events. 

For example, a gaming app may want to track 3 in-app events to measure the successful impact of a user acquisition campaign - app opens, gameplays, and in-app purchases to unlock special features or gaming levels. In this case, the advertiser can set three goals in the platform - and decide on the payment structure most suitable for them.


Factors influencing Apple Search Ads cost

There are a few things to keep in mind when figuring out an estimate for your journey into Apple Search Ads. Read on to find out more about them.

Bid amount

Different industries have different bid amounts which is usually a normal spend for that vertical. Speak to your peers in the industry who have experience with Apple Search Ads, to understand what is the average bid range that works for them. Our team often organizes sessions with app marketing experts to discuss such aspects of paid iOS advertising. The bid amount also depends upon the keyword strategy that you choose - it will differ based on whether your objective is brand keywords, category keywords, competitor keywords, long-tail keywords, seasonal keywords, or local language keywords. You can check out our LinkedIn article on the different varieties of iOS keywords to get a quick overview idea. Another aspect that influences bid amount is the keyword match type that you are looking to utilize - exact match, broad match, or Search Match.

Ad relevance and quality

An important factor that impacts Apple Search Ads cost is how iOS users perceive your ads. Apple Search Ads provides three pivotal ad placements to garner user interest - the Today Tab, Search Tab, and Search Results Page. Each ad placement requires a different type of ad communication. Out of the three placements, the Today Tab and Search Results Page also open up Custom Product Pages(CPP). Optimizing the advertising content goes a long ago in maintaining costs.

Historical performance

If you have run Apple Search Ads before, then of course, go through past campaign data to look for opportunities to cut costs, redistribute the budget, and keyword bid strategy optimization. If this is your first rodeo with Apple Search Ads, then look at the historical performance of your App Store Optimization(ASO). This will give you insights into high-quality, high-intent keywords that have consistently improved your organic ranking. It will also help to decide which keywords are worth bidding on, at least to get started. 

Market competition

Is iOS paid advertising a common thing in your category? In that case, be prepared to look at high costs. However, there are a lot of knowledge resources, and campaign experts around who can help bring down the initial high cost as the usage of the Apple Search Ads matures for your brand. The learnings can help you differentiate what works for you versus the other players in the market. It gives an insight into what kind of users prefer your app and why they prefer it.

Strategies to optimize Apple Search Ads cost

Why are app marketers using Apple Search Ads in the first place?

As we mentioned before, iOS paid advertising can get expensive. But this is also rapidly evolving as a premium user acquisition channel among app marketers. And for good reason.

  • There are about 1.5 billion unique iPhone users across the globe
  • The Apple Search Ads campaigns have conversion rates as high as 60%
  • The iOS user spends 50% more on in-app purchases and in-app events, compared to the Android user
  • Emerging markets like Asia are rapidly increasing their 20% iPhone market share, while Saudi Arabia is already at a 46% penetration level
  • Easy access to launch localized app marketing campaigns. 

Keeping the pros in mind, advertisers are increasingly looking to make targeted iOS user acquisition as part of their marketing strategy.

Popular tried-and-tested Apple Search Ads cost optimization techniques

Setting realistic budgets

iOS advertising costs include two things - the ad spends on Apple Search Ads and the App Store Fee. The App Store Fee is a commission Apple charges for in-app purchases or any other transactions made via the app. Free apps, however, don’t have to pay this fee. In the first year, the App Store will charge a commission of 30%, which reduces to 15% for subsequent years. For small businesses, with turnover not exceeding $ 1 million, the fee is 15% commission.

Keeping this commission structure in mind, the iOS app advertiser has to draw out a budget plan to reflect the complete ROI. This will help to arrive at a realistic estimate of how much you can expect to spend on advertising your app and getting users to make transactions in the app. 

Making a decision on keyword categories to target, ad placements, and keyword match types to explore will also help to improve the estimate of your Apple Search Ads spends.

Targeting the right keywords


Just because a keyword is working for your category players or competitors, does not mean it will work for you. The platform helps to see the Rank, Volume, and Performance of the keywords. These markers should be studied carefully to understand what scale of targeting the business can afford. A common practice is to target a holistic blend of keywords to balance Apple Search Ads cost.

  • Significant brand keywords where users are directly searching by brand name or other brand identity
  • Long-tail category keywords that are descriptive and specific in their asks indicate high-intent users
  • Low-volume keywords that have contributed to higher conversions post-install
  • Seasonal keywords that resonate with the app’s products or offerings
  • Local language keywords that have lower bid costs but higher conversion rates

This step can always be resolved with a GenAI keyword recommendations tool that can cut down on time and effort to build an exhaustive, high-value keyword list.

Monitoring and adjusting bid amounts

This is where full-funnel MMP integration plays an important role in getting a complete view of the analytics. It will help to understand at what bid range, a keyword delivered its best performance. It also helps to map this keyword level performance to ROAS or ROI, whichever you want to calculate for a transparent understanding. Using rule-based automation, it becomes easier to monitor and adjust the bid amounts in real time. A few best practices of refining keyword lists, ad placement rotation, and full-funnel analytics tracking also contribute to optimizing bid amounts.


Utilizing negative keywords to optimize Apple Search Ads cost

Negative keywords are essentially irrelevant keywords for which you do not want ads to appear. Consistently maintaining a negative keyword list helps to minimize wasted ad appearances, and arrests budget bleeds.


A/B testing ad creatives

Creatives are mostly involved in Today Tabs, Search Results Page, Custom Product Pages, and the Default Product Page. In Today Tab ad, primarily shows the app icon, title, subtitle, and animated assets from the CPP. For Search Tab ads, it just shows the app icon and leads to the Default Product Page. Search Results Ads in addition to the app icon, title, subtitle, and other details, also show the preview of the creatives of the linked CPP. 

Therefore, the major creative optimization opportunities are for the Custom Product Pages and Default Product Page. 35 CPP variations can be generated at a time and 3 variations of the Default Product Page. The performance of the CPPs is the best indicator of which creatives are working out. The Default Product Page variations can also be tested out to see which drives the most downloads and post-install user activity. Utilizing the data from both sides, it is possible to finalize a creative strategy that is finally working to impress your iOS users.

Apple Search Ads cost optimization business case study

A leading real-money gaming app from India was looking to achieve category leadership and amplify its App Store Share of Voice (SOV) on certain vital category keywords. The brand sought the help of Apple Search Ads campaign experts, to utilize their industry insights, to filter a list of keywords to target. Once the keyword strategy was locked, the efforts of the team moved into constructing structured campaigns with clear objectives and ad groups reflecting specific search query themes. 

The bidding on targeted keywords was optimized with necessary automation, to ensure the budget was not leaking during odd campaign times or on low-performing keywords or ad groups. The campaign efforts bore fruit. 

The gaming company was able to reduce its Customer Acquisition Cost(CAC) by 60% without compromising campaign efficiency. Apple Search Ads also helped the brand to secure 41% growth in downloads, and an 81% increase in goal event conversions. 

If you are looking for advice on how to manage your Apple Search Ads cost - budgeting, spends, optimization, the campaign expert team at Newton will be happy to guide you through the process, in the right direction.

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