Google has begun testing a new ad slot on the Play Store in preparation for the I/O developer conference in May. The search giant could substantially expand its Play Store search ads business if the move is implemented, providing developers with access to additional premium real estate to market their apps.
Following a similar move by Apple two years ago, Google is also testing an ad slot that appears on the Play Store’s search menu when Android users enter keywords to find apps. The Android news site, Android Police, first identified the test, noting that Google had been experimenting with app “recommendations” in this area since last year. However, Google recently added app suggestions labeled as ads in the same slot. Despite Google’s confirmation that it tests new features from time to time, the ad slot test isn’t yet visible to everyone, indicating that it’s a test.
While Google hasn’t commented on the exact timeline for the public launch of the ad slot, it’s currently visible in multiple markets worldwide. If the ad slot is rolled out extensively, it could substantially boost Play Store revenues. Apple generated an additional billion in revenue when it introduced new App Store ad slots in less prominent locations, according to experts.
Google Play’s ad business is likely a sizable figure, with Statista data estimating that the platform generated roughly $48 billion in mobile apps in 2021. However, court filings unsealed during a Google antitrust case revealed that Google Play app store revenue totaled $11.2 billion in 2019.
The search giant’s new Play Store ad slot comes as Google has been pressured to make concessions on Play Store commissions due to new regulations and lawmakers’ demands. To comply with these pressures, the company has begun rolling out third-party billing options to global markets, which offer developers reduced fees if they don’t use Google’s billing services. Spotify has already adopted the program while dating app Bumble plans to follow suit.
By finding a new way to generate revenue from Play Store ads, Google can bolster its bottom line during a time of significant regulatory pressure. The availability of new Play Store search ad slots may significantly impact Play Store revenues, should they be introduced broadly.