Apple Pressed the Reset Button on App Marketing

With a few unannounced decisions, Apple has radically changed the landscape of app marketing. The first shoe to drop was yesterday’s hints that Apple changed the way the App Store charts are ordered. Now, instead of using pure download numbers, it is believed that the App Store charts are sorted using metrics such as engagement (how long users use the app), user reviews, and other data points.

Then, it came across my Google Reader feed that Apple is banning apps that use Cost-Per-Install offer walls from ad networks like TapJoy. As are all Apple rule enforcement changes, this is being applied selectively. However, this is huge news. CPI ads are the most effective way to market apps, period.

CPI ads work like this: an ad shows up in the app you are using. The ad will ask you to install another app. Tapping the ad will open up the App Store to that app’s page. If you install this app, you will receive a reward of virtual currency in the app you were previously using the next time you run it. The advertiser (the publisher of the other app) pays for this ad, and the install fee is split with the ad network and developer of the app the user tapped the ad in.

Ostensibly, you are buying users with CPI ads. But the reality is you are buying a chart position. Users coming from incentivized installs don’t really care about your app. They are installing it just to get credits in the app they saw the ad in. Therefore, users that are acquired via CPI networks don’t monetize very well.

However, by buying hundreds of thousands of installs per month at a rate of 45 cents or more a pop, you could essentially buy yourself a spot on the App Store’s top downloads chart. Users you acquire from the chart monetize far better because they are actually interested in your app.

It was only a matter of time before Apple intervened. This model has come under fire recently because some unscrupulous developers have created rings of non-functional and deceptive apps. These were used as an attempt to harvest cash from CPI networks and other revenue boosting tricks.

Plus, it was always amazing to me that Apple owned the most valuable piece of real estate on the mobile web, the App Store charts, and was allowing random developers to buy their way into it by spending $50k or so with third-party ad networks.

This is as huge a market shift as when Facebook shut down the viral channels awhile back.

The big problem is–how do you market an app now? The old plan was simple: publish an app and see how it monetizes from organic traffic. The next month, buy a ton of users to get your spot in the App Store charts. Observe the metrics from all this new traffic. If the app seems hopeless, kill it. Otherwise, keep iterating, advertising, and monetizing.

Here’s what we know so far:

  • Free2Play isn’t dead. CPI networks are a prime marketing tactic of f2p games. The fact is, it’s almost impossible to convert someone from a CPC ad to an iTunes sale. It’s far easier to convert users from CPC ads to a free app. People will try almost anything for free. Free2Play is still a big part of your marketing strategy.
  • Your game might actually have to be good. To defend your position in the AppStore, you aren’t just going to be able to keep buying users. With Apple’s new engagement metrics, you’re actually going to have to keep users entertained. Which is a novel concept for a new generation of game designers raised on manipulating excel spreadsheets for sales funnels.
  • Branding may actually become relevant. The vast majority of top ranked apps on the charts are unbranded games. Perhaps teaming up with a brand that can get your marketing message out there and generate some kind of call to action will be an effective tool for user acquisition.
  • New forms of virality have to be invented. Perhaps it’s possible to find a new way to virally acquire users without violating Apple’s TOS. Something less blatant than giving people credits for an install. Perhaps creating a network of games that tie together in a less obvious way is a good start.

Today, Apple toppled empires with the flick of a finger. That’s what makes this industry fun.

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