Maybe money can't buy happiness, but for a long time, it could buy something almost as desirable: App Store fame and glory. Wily iOS developers have come to depend on incentivized downloads to vault their applications into the upper rungs of the storefront's coveted Top Apps countdown, teaming with app monetization and distribution platform partners to create visibility and demand for their newest efforts via promotions within existing iOS favorites. For example, an established iPhone or iPad hit might offer consumers virtual currency and other premiums in exchange for downloading an up-and-coming app featured by the sponsor. And while Apple (NASDAQ:AAPL) claims a 30 percent cut of all conventional in-app consumer purchases, these pay-per-install app agreements exist outside of the computing giant's purview, with all money changing hands between developers and distribution platform providers.
That's why it's surprising Apple allowed the incentivized install model to flourish as long as it did, but last week the hammer came down. App monetization platform Tapjoy reported that Apple recently rejected a wave of applications running incentivized promotions--according to Tapjoy, Apple contends that the banned apps violated section 3.10 of the App Store Review Guidelines, which states "Developers who attempt to manipulate or cheat the user reviews or chart ranking in the App Store with fake or paid reviews, or any other inappropriate methods, will be removed from the iOS Developer Program."
Tapjoy states that Apple's move seems to herald a new interpretation of the 3.10 clause. "Tapjoy, AdMob, iAd, Flurry, W3i and others all power various forms of app install advertising," the firm writes in a letter to developer partners. "Many of the brands that promote their apps via Tapjoy also do the same on other major ad networks across the mobile advertiser ecosystem, and all of the apps we promote on iOS are Apple-approved... Unfortunately, we believe much of this is caused by misconceptions around pay-per-install, the free-to-play model, cross-app promotion and their collective value to the ecosystem. We believe there are significant benefits to the advertiser (only pay for what you get), the publisher (monetize users who otherwise wouldn't pay), and perhaps most importantly to the users, who not only get to discover new, exciting applications, but receive what is essentially a coupon for ad-funded virtual currency inside one of their favorite apps."
It's likely no coincidence that Apple's decision to strike down incentivized installs follows fast on the heels of reports the company has tweaked the App Store's ranking system, adding in new weights on top of download numbers to determine the most popular iOS releases. Inside Mobile Apps reports the changes likely include factors like active app usage--Facebook's iOS app, which is accessed by close to 40 million users every day, immediately jumped to top of the free apps chart after hovering between the number 10 and 20 spots for more than a year. Apple being Apple, it's yet to publicly explain exactly what's changed about the rankings or why--nor is it clear what it means for the long-term future of the App Store, although a ranking system less dependent on download numbers and more reliant on metrics like user engagement should improve discovery by shining a spotlight on the most deserving and compelling solutions.
In the meantime, companies like Tapjoy are at a crossroads. Speaking at VentureBeat's Mobile Summit on Monday, Tapjoy CEO Mihir Shah said that after speaking to Apple, the company will voluntarily cap pay-per-install promotions so that apps cannot reach the App Store bestseller list on incentivized downloads alone. Shah adds that other developers are also in talks with Apple to work towards a resolution that still accommodates the pay-per-install model without negatively influencing App Store rankings: "We only win if Apple wins," Shah said. "Apple is the king of the App Store. We need to find a sustainable way to work with them." Never forget: The App Store is Apple's world--iOS developers only exist within it. -Jason