SMB: Running Meta Ads on iOS? Beware of Apple’s 30% App Store Tax
Reading Time: 4 min
Do you run ads on Facebook or Instagram with your iPhone? If so, watch out for the “Apple Tax” – a 30% commission Apple takes on ad revenue generated through iOS apps, which could quietly drain your ad budget. Learn how this fee works and discover strategies to protect your hard-earned marketing dollars.
Summary
Decoding the "Apple Tax"
The term “Apple Tax” refers to the commission Apple has charged App Store developers since July 2008. Typically set at 30% of an app’s sales revenue, this commission is the price developers pay for using the App Store platform.
While businesses in Hong Kong were previously exempt from this fee, this changed on July 1, 2024. Apple now extends its 30% commission to ad revenue generated within iOS apps in Hong Kong. In practical terms, for every $1,000 spent on ads, $300 goes directly to Apple, leaving only $700 allocated to actual ad placement.
Therefore, if you’ve observed a recent increase in your Facebook and Instagram ad expenses, the “Apple Tax” may be the reason.
Four Ways to Avoid the 30% Apple Tax
How to avoid these changes from Apple? Here are several methods to help you avoid this additional fee.
1. Utilise Desktop or Mobile Web Browsers for Ad Placement
This is the most straightforward approach. Since the “Apple Tax” only applies to iOS apps, you can bypass the fee by accessing facebook.com or instagram.com through a desktop or mobile web browser for your ad campaigns.
2. Leverage Meta Business Suite
Meta Business Suite is a free tool that allows brands to manage their Facebook and Instagram business accounts. Access Meta Business Suite via a desktop or mobile web browser and utilise the “Boost Post” feature, effectively circumventing Apple’s fee. However, relying solely on Boost Post for your advertising is generally not recommended.
Further Reading: Why Brands Should Think Twice Before Using Boost Post
3. Opt for Ads Manager
Meta offers a robust Ads Manager for users requiring advanced advertising features, providing a more comprehensive array of customisation options and functionalities. Again, by accessing Ads Manager through a desktop or mobile web browser, brands can fully leverage their capabilities without incurring Apple’s commission.
4. Prepaid Advertising Funds
Within the payment settings on Facebook.com, brands can add prepaid funds to their Meta ad accounts. This way, even when managing campaigns through the Facebook iOS app, the 30% fee won’t be applied. However, if you choose this option, monitoring your ad account balance is crucial to ensure sufficient funds.
Conclusion
In conclusion, while Apple’s 30% commission on iOS app ad revenue presents a new challenge for marketers in Hong Kong, it’s not an insurmountable hurdle. By understanding the rules of the game and employing savvy strategies like those outlined above, advertisers can effectively minimise or even eliminate this additional cost. Remember, knowledge is power – especially when it comes to protecting your advertising budget.
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