Although it’s still too early to tell, it’s likely users will engage with their Apple TV over longer, but fewer, overall sessions – it’s a lean-back device, after all – so “apps that normally score well on shorter sessions – often ad-driven apps – will be challenged to generate enough inventory,” said Martijn van der Gun, an independent developer based in the Netherlands who’s using AppLovin’s tvOS SDK to help monetize several home workout apps.
That said, van der Gun is bullish on the platform. Advertiser interest may be nascent, but apps are putting down roots.
“Installs are pretty good, considering the short time that Apple TV has been available, although install rates aren’t as high as compared to other devices, [like phones],” said van der Gun, who noted that he sees hundreds of daily downloads of his tvOS apps. “But there are still only a few fitness apps available on the Apple TV, which is definitely to our benefit.”
The Screening Process
It’s also not 100% clear, as it never is, exactly what Apple wants from advertisers. Beyond user experience guidelines, Apple doesn’t print or distribute rules around the best way for a developer to monetize, whether than be through in-app purchases or through a paid, freemium or paymium model. (Paymium is when a user pays to download an app and then continues to generate revenue by making subsequent in-app purchases.)
The paid model does seem to be winning out, though. At its Tech Talk in Toronto on Dec. 7, Apple told developers that 47% of tvOS apps are paid, 38% are free/ad-funded, 12% are freemium and 3% are paymium.
“Apple TV opens up TV-based gaming to developers who are much more familiar with monetizing through advertising and in-app purchases,” said Matt Turetzky, chief operating officer of NYC-based app publisher Lima Sky, maker of the “Doodle Jump” game, which hit No. 1 in the App Store’s paid app rankings for a period in 2010. There’s now a tvOS version.
One advertiser already experimenting with video placements on tvOS is HotelTonight. The hotel booking app launched its first video campaign on Apple TV in January.
The spots are similar to the branded video content HotelTonight ran as part of a user acquisition campaign across AppLovin’s publisher network last year.
But it’s a little more complicated in the TV environment, said HotelTonight CEO and co-founder Sam Shank.
If users see an app install ad on their phone, they can tap to download on that same device. If they see the ad on their TV, though, they’d have to switch to their phone if they want to install the app, which creates another layer of friction. HotelTonight has no plans to create its own app for Apple TV right now.
Which is why Apple TV feels more like a branding play at the moment, although digital targeting is where the potential lies. For now, HotelTonight is just doing country-based targeting, but Shank said he expects that “the targeting parameters will get more sophisticated over time.”
“Apple TV is more of a channel for awareness now, rather than transacting,” Shank said. “But I could imagine a scenario down the line where TV apps and the apps on your phone are in sync, which might lend itself to a transaction experience.”
There are clearly still kinks to work out before Apple TV becomes a regular part of an advertiser’s budgeting considerations, but the opportunity is there.
Even though Apple TV launched in 2007, before both Roku and Chromecast, its market share lagged against competitors. But in November, less than three months after its most recent launch, Apple TV became the leading set-top box, with 31% of the streaming TV hardware market, according to Slice Intelligence.
It’s also true that Apple sleek platforms have always been attractive to brands and advertisers alike.
“Apple TV is interesting because most brands don’t build Android-first, they build Apple-first – and that should have meaningful ecosystem effects,” said Michael Katz, CEO and co-founder of mParticle. “Apple essentially has a monopoly on high-value users, so things sort of trickle down from there.”