Recent news about Apple cracking down on pay-per-install campaigns has a number of companies including Tapjoy and Flurry rethinking their business models. So, to answer the question about whether pay-per-install works in the mobile phone world, it definitely does. In fact, it works so well that it has the ability to propel any app into the App Store's Top 25 on the first day. This means that anyone who has enough cash to pay for such a campaign could push any app into the top download spots. It doesn't matter if the app is good or not because you can pay for installs.
But, a few weeks ago Apple changed its approach to app rankings and no longer relies solely on the number of downloads for the ranking. Instead, it has developed another (unpublished) formula that uses other factors such as app rankings, reviews, and usage statistics to determine the top spots on the App Store. It's a more pure and qualitative approach to app ranking and means that hopefully more well-deserving apps make it into the top spot. At the same time Apple made changes to its ranking algorithm, it also started cracking down on incentivized apps, or apps that pay to get downloads. This has put companies like Tapjoy and Flurry in a tough spot to modify their business plans to account for this change. More on that in a minute.
How Does Pay-Per-Install Work?
But first, how does pay per install work anyway? Let's say you’re playing a free game that offers you virtual currency to get more weapons or add additional levels. The game that is utilizing pay-per-install mechanisms will present you with an "offer wall" of apps that you can download for free or buy. In return for downloading and installing the application, you are given additional virtual currency or access to the next level of the game. When that free or paid app is installed by you, Tapjoy or Flurry charges the owner of that app a fee. It could be 25 cents or 99 cents or more, depending on the agreement per install. Because Tapjoy and Flurry reach millions of users, they have the ability to drive lots of downloads and installs of those apps. Textfree+, for example, has been able to impact millions of downloads due to its incentivized program where you can get more calling minutes for free by downloading apps that are displayed on its app wall. The huge number of installs was changing an app’s ranking in the App Store because that was the only metric being used.
A few weeks ago, without announcement, Apple began rejecting apps that had incentivized programs built into them on the grounds that they are violating Section 3.10 of the developer guidelines which states "3.10 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." There are a lot of apps using Tapjoy and Flurry and other companies for quick downloads, so this has thrown a lot of companies off balance and scrambling to figure out what to do. Some argue that these methods are unfair and allow some wealthy developers to game the system. Apple is simply leveling the playing field for all.
What’s a Developer to Do?
For their part, these companies are talking with Apple about how they can modify their approaches to still offer a service and yet continue to operate with this business model. Tapjoy has voluntarily put a cap on its pay-per-install promotions so that no app can climb into the Top 25 rankings by installs alone. Apps should be able to reach that list through user recommendations, good reviews, and longer usage, or engagement. There is no comment yet from Apple if this change will be acceptable or not. Apple is reported to be in discussions with developers of some of the major applications that are using this functionality. In the meantime, what should you do? You can install the small amount of code from Flurry, Tapjoy or another vendor into your app and leave it dormant until it gets the problems worked out. If it allows the incentivized programs to continue but on a limited basis, you will at least have the code base installed in your app, ready to enable at any given time. This will save you having to resubmit your app for approval if you decide later on to add their code to your app.
If it stops the programs altogether, there will be no harm having the code in your app since it's not being used for that purpose. But, if these vendors have to change their business model to the traditional ads, then you'll have the code ready to use for that purpose most likely or at least to gather stats on how your app is doing.