Google Puts Ads in Its App Store to Court Mobile App Marketers

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Publishers Can Promote Their Apps Within Google Play's Search Results

Google will start showing ads atop

Google has found a new place to put search ads as it courts an emerging crop of advertisers.

Google will start testing ads within the search results in its Google Play app store, the company plans to announce on Thursday. Similar to Google's traditional search ads, the Google Play search ads will appear atop the results for searches conducted within the app store and will carry a yellow label denoting them as ads.

"In many ways it's very similar to Google search. We're getting users at the point of intent when they're looking for apps, and we're offering them a high-quality way for them to consider other apps via a paid experience," said Jerry Dischler, Google's VP-product management for AdWords.

Google declined to say how many advertisers are involved in the test. The company is still sorting out whether the ads will be sold on a per-click, per-install or other basis and how advertisers may be able to target the ads.

Google's move signals the rise of app publishers as an important advertising segment. King Digital -- the company behind popular mobile game Candy Crush Saga --spent$107.8 million on sales and marketing last year and has promoted its games with ads on TV, as has fellow gaming company Machine Zone. Machine Zone, which makes "Game of War," Super Cell ("Clash of Clans") and UCool ("Heroes Charge") all advertised in the Super Bowl this year.

If app developers adopt Google's app-store search ads, in some cases Google may be making its own money back. Over the past 12 months, the search giant has paid out $7 billion to developers through its app-store sales and in-app purchases. The company claims to have driven hundreds of millions of app downloads through its app store.

Google has been courting this growing advertiser segment for a few years. In 2011 the company introduced so-called "app install" ads that feature links to download a mobile app from Google's or Apple's app stores. The ads were initially limited to mobile search results pages, but last year Google extended them to YouTube and added a way for app developers to advertise to people who had already installed their apps.

But Google isn't the only major online ad seller to take notice of the emerging customer base. Facebook, Twitter and Yahoo offer their own ad products to drive downloads for app developers. Last week Yahoo extendedits own app install ads to run across more of sites, including Tumblr, and added video app-install ads.

To strengthen what it offers app developers amid the rising competition, onTuesday Google acquired Toro, a company that had specialized in Facebook's app-install ads. That company will stop selling Facebook ads, and its employees will join Google's mobile ad team.