The Changing Face Of Mobile Acquisition - and App Monetization

Interesting news on further moves by Apple to limit the use of ‘incentivized’ video watching (to give one example) or social sharing within mobile apps. Put simply, there’s now real doubt that the traditional methods of encouraging video plays and social shares using incentives within the app will be tolerated any longer, on iOS at least.

In the past (with a bunch of caveats that we’ll come on to in a minute) these arrangements suited both sides of the coin. For the advertiser, video ads delivered new installs, theoretically improved chart position and thus organic acquisition, and represented a good deal. For the app in which the ads were shown they offered a handy revenue stream, particularly for those ‘hard to monetize’ users that are otherwise contributing nothing to revenue.

Given that this all seems mutually beneficial, it would be fair to ask what upsets Apple so much. And the answer, in most cases, is that by its very nature the incentive drives non-organic user behavior that in turn compromises the supposedly organic nature of the app store charts, which in turn are relied upon by users to represent a true view on what is popular at that time.

To take one extreme: it’s almost certain that offering an incentive such as virtual currency in one app to users who install another app is a thing of the past. You won’t get away with such a clear attempt to drive installs of one app that are only motivated by rewards in another (the one the user actually likes). Whether video ads or indeed any ads are likely to go the same way is debatable - but a real risk.

So What Does It All Mean?

There are implications for both sides of the equation - implications that in some senses reflect the caveats we mentioned above. Firstly, for the buyer of ads hoping to drive installs, it might be time to start focusing on smart ways to drive organic acquisition rather than relying on the ‘easy’ option of paid for installs. Aside from anything else (here comes the first caveat), paid for installations have never been as valuable as the real deal, and the effectiveness of chart hacking has been on the wane for some time.

That’s not to say that all incentivized installs are bad, simply that we would do well to consider the alternatives and work as hard as possible to make them viable.

On the other side of the coin, the app monetizing via advertising (of whatever type) could probably also benefit from a ‘back to basics’ approach. Ultimately, only a small number of businesses will ever turn a profit solely from advertising, and as a whole the app industry needs to get beyond the idea that passing users from one title to another is a sustainable business model.

Sooner or later, the app developer has to understand how they add value, and focus on that specifically. In turn they will hopefully enjoy revenues - ideally directly from users - that come as a consequence of providing superb experience and developing long-standing relationships with their users. That’s the future!