Apple Offer Wall Ban Effects Entire App Ecosystem

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app.jpgADOTAS – Can we all agree that discovering apps in the App Store sucks? Maybe Apple could follow GetJar’s lead and integrate Facebook Connect for a truly social experience, but somehow we doubt that’s going to happen.

While on the user front, it’s just a pain in the ass to navigate the App Store, for developers it’s a real drag getting your app noticed. So companies such as TapJoy (which earned a bad reputation when its name was OfferPal) came up with a clever marketing scheme — offer virtual rewards in exchange for downloading free apps, charge on pay-per-download basis.

Well, Apple doesn’t like these so-called “offer walls” and has decided to ban them by re-interpreting clause 3.10 in the mobile app developer agreement: “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.” So, Apple argues, by enticing users to download other apps by offering rewards, an app is manipulating Apple’s app ranking.

In addition, Apple switched up the App Store’s ranking algorithm for the top apps to to give more weight to user engagement than downloads — not surprisingly, Facebook immediately hit no. 1.

But wait… Doesn’t the latter move seem like enough to cut down on the rankings influence of incentivized downloads? If user engagement is more highly valued in the ranking algorithm, only downloaded apps that actually catch on with users (i.e., good ones) will benefit in the App Store.

TapJoy posits that the move against the “free-to-play” practice is a losing proposition for all parties — including Apple.

“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,” the company said in a release. “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. All of this, of course, adds up to value for Apple as well, by creating a viable and thriving ecosystem.”

In-app advertising hasn’t been a huge hit, especially in video games, but offer walls seemingly enabled a decent proposition for both users and developers, both those who wanted revenue and those who wanted to be noticed. App search and research firm Xylogic suggests Apple’s decision to cull the practice will kill an emerging revenue stream as it truly starts to flow.

“This change forces “free-to-play” game developers to retool their business models and may compress profit margins in the near term. It may make Apple’s platform possibly less attractive vis-a-vis Google Android if developers can’t find a suitable alternative to offer walls.”

But it’s Pascal-Emmanuel Gobry over at Business Insider who has the most damning evaluation, claiming Apple’s decision “shows discovery is broken on the app store, and Apple doesn’t like its weaknesses exposed. Searching the app store is ineffective unless you know what you’re looking for, and ‘top 10’ lists just invite gaming.”

1 COMMENT

  1. “Can we all agree that discovering apps in the App Store sucks?”

    No, we can’t, because I don’t think that it does. Sorry.

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