Apple clamps down on pay-per-install iOS apps

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Apple (NASDAQ:AAPL) is cracking down on iPhone and iPad applications that offer incentives--e.g., virtual currency--to encourage consumers to download other apps. App monetization and distribution platform Tapjoy reports that Apple recently rejected a wave of applications running incentivized install promotions--according to Tapjoy, Apple contends that the banned apps violated section 3.10 of the App Store Review Guidelines, which states "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."

tapjoy virtual currency Tapjoy states that Apple's move seems to herald a new interpretation of the 3.10 clause. "Tapjoy, AdMob, iAd, Flurry, W3i and others all power various forms of app install advertising," the firm writes in a letter to developer partners. "Many of the brands that promote their apps via Tapjoy also do the same on other major ad networks across the mobile advertiser ecosystem, and all of the apps we promote on iOS are Apple-approved... 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. 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."

Incentivized app installs are viewed as a reliable launching pad into the App Store's coveted Top Apps countdown, enabling developers to create visibility and demand for their newest releases by promoting their efforts via existing iOS favorites. But while Apple claims a 30 percent cut of all in-app consumer purchases, the computing giant does not earn a share of pay-per-install app agreements: All money changes hands between developers and distribution platform providers.

It's likely no coincidence that Apple's decision to strike down incentivized installs follows fast on the heels of reports the company has tweaked the App Store's ranking system, adding in new weights on top of download numbers to determine the most popular downloads. Inside Mobile Apps reports the changes likely include factors like active app usage--Facebook's iOS app, which is accessed by close to 40 million users every day, now sits atop the free apps chart after hovering between the number 10 and 20 spots for more than a year.

"It looks like it's daily actives and monthly actives. Basically, how much is the product used? Is it just sitting there on the handset or is it being actively used?" said Glu Mobile VP of Marketing Mike Breslin. "Download numbers can have a lot of duplicity."

For more:
- read this TechCrunch article

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