Apple’s Latest App Crackdown: Why Ban Incentivized Video Ads?

Written on
Jun 18, 2014 
Si Shen  |

ADOTAS — Recently, Apple announced that they’d be rejecting apps that include incentivized video ads and social sharing that promote other App Store apps, citing the fact that these strategies “influence the App Store and its listing order or ranking.”

This isn’t Apple’s first crackdown on incentivized ads. Apple exercised its right to quality control and stopped incentivized app downloads back in 2011. By banning direct downloads in exchange for in-game benefits, Apple laid down a roadblock among those developers who could be paying their way to the top of the App Store charts, rather than on merit.

But are incentivized video ads really as harmful to Apple’s ecosystem as incentivized downloads?

I’d argue that there could be a place for video ad incentives on iOS.

Incentivized video ads are an opportunity

Understandably, incentivizing users to download an app in exchange for credit is an effective way to buy your way to the top of the App Store charts.

And there’s little loyalty to an app that’s been downloaded in exchange for a reward. In fact these types of downloaded apps tend to get deleted or forgotten about by the user.

Video ads on the other hand are a different story. Users aren’t required to download an app to receive the reward. If you look at this from the advertiser’s perspective, the advertiser isn’t paying for a new user directly, considering videos are paid for on a CPM (cost-per thousand) basis.

Incentivized video ads at the same time don’t interfere with the user-experience as it’s usually an opt-in decision by the user to open an incentivized ad. to “out out” of the video ad, users can simply close the ad or simply ignore the ad altogether while the video plays. Some ad networks will refer to this type of mobile ad format as “native advertising” (although this term is used loosely).

When you compare an incentivized download on iOS compared to an incentivized video, the types of users that download apps based on the latter type of ad format tend to return or engage with the app more frequently.

As far as video ads are concerned, quality apps still rise to the top

What really distinguishes incentivized downloads from incentivized video ads is quite simple. The latter is an opportunity to relay a message, which the advertiser is completely relying on to drive new users. With that said, the beauty of incentivized video ads is that it’s not the incentive itself that drive new downloads.

If the message delivered doesn’t resonate with the viewer, at the very least the user walks away content that they’ve received their intended reward in exchange for between 15 and 30 seconds of their time in watching the ad. It’s not as though they’ve had to download an app that they’ll never open again, so I’d argue the user experience remains positive.

But on the other hand if the message is compelling enough for the intended target audience, the viewer downloads the app on their own volition and walks away not only with a reward, but a brand new app that they wanted to download.

You could say that although the first step to getting users to view an ad is based on a reward system, what ultimately drives app downloads and any influence on the App Store rankings was purely because the app’s utility to the viewer resonated enough to merit an install. At the end of the day the decision-making power is left entirely up to the audience to choose whether or not to download the app. And incentivized video ads also leave it up to the developers to deliver quality messages for viewers that captivate or hit the right note, or risk wasting their mobile ad budget.

Si Shen is the co-founder and CEO of PapayaMobile, the social gaming network with more than 127 million gamers and parent company of AppFlood, the largest global mobile RTB network out of China. AppFlood connects advertisers with more than 1.5 billion impressions a month.

Si Shen launched Papaya in 2008 with her co-founder Qian Wenjie. The two met in the Computer Science Department at Tsinghua University in China. Prior to starting PapayaMobile, Si Shen worked on the Google mobile team for 5 years. PapayaMobile is headquartered in Beijing with offices in London and San Francisco.

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