Being the default search engine on iOS is highly lucrative for Google, with Apple’s devices predicted to account for approximately 50% of Google’s mobile search revenue.
With Apple devices accounting for nearly half of Google’s search revenue on mobile, the search giant was always expected to fight for the licensing deal despite analysts suggesting as far back as 2016 Googles dominant position would be enough to drop the deal and trust that Apple users would select them as the search provider regardless.
The announcement of the deal confirms this was a risk Google was not willing to take, perhaps having learnt from the IOS 6 update that took both YouTube and Google Maps out in favour of Apple on Apps.
Ending the deal would have been embarrassing for Google. It’s a company that is quite literally built on search, and it would be losing default status on a browser responsible for nearly 50% of the mobile market.
Not just the loss of a major mobile partner: Apple has an enviable position of holding the majority of the high end smartphone market with iOS users notably being vastly more valuable than Android when it comes to ad revenues – iOS users buy anywhere from 4/8 times, by value, more valuable then Android depending on location.
Right now, Google is the default — that means unless the user actively changes it, all the searches they do on their iPhone will be powered by Google. Google then learns about the user and places ads by these results, and Apple shares a portion of these advertising revenues.
Microsoft’s Bing did powers Siri, Apple’s voice-controlled personal assistant.
Whist the details of the arrangements remain confidential the deal estimated to be worth $1bn in 2015 and predicted to be as high as $4bn a year as part of the recent deal secures the continued collaboration of two of the most significant companies within the world of search.
There are potential negative impacts of the deal not least is Google’s rising traffic acquisition costs cannot sit comfortably with the board of Alphabet Inc and data privacy activists may see Apple Inc agreement for greater data sharing as a capitulation by the tech giant, but what is for sure;
Google remains the dominant player within search and advertisers will need to respond to the changing make up of traffic as a result of this deal because the majority of the data driven optimisation and work done on campaigns for the last two years became almost redundant overnight.
If you are worried about the impact of the changes, get in touch with a member of the team to arrange a complimentary review of your digital marketing.