Given how hard it is for some developers to get their apps noticed these days (hundreds of millions of apps out there, and counting), it’s no wonder that since Apple (NSDQ: AAPL) shut down one of the more effective marketing tools — pay-per-install, which lets users pick up virtual currency for an existing app when they download new ones — developers have been feeling the pinch. Mobile marketers Tapjoy, which conducted a study of app publishers since the policy change, says it might even drive some away from iOS altogether.
The survey, based on responses from nearly 500 developers (496 to be exact) brings up some of the issues that app developers have been facing since Apple started to reject those apps that feature PPI.
While you can argue that Tapjoy’s data is biased — enabling PPI services is a cornerstone of its own business model, so Apple rejecting apps that feature PPI will have a knock-on effect for Tapjoy itself; and for all we know Tapjoy may have even only asked those developers that were using its own PPI services, thereby not getting the most complete picture of the situation — it is still a sign of one route to revenues and discovery getting closed down, and has undeniably had a negative impact on those developers that were using it. Some of the stats that came out of the survey:
— Half of respondents reported users wanting in-game currency promotions;
— A quarter reported more user complaints;
— Nearly 15 times more respondents reported a decrease in revenues. Around two-thirds of developers said at least 20 percent of total revenues were generated by
the PPI model, and some claiming that over 60 percent of their revenue came from PPI;
— Developers noted that the PPI restrictions has also resulted in sharp decline in daily active users;
— They also complained that taking away PPI restricted one of the key freemium models for apps. In one developer’s words: “Four million people want [our app] for free, while only tens of thousands want it for a buck or two. With PPI, we could offer the app for a ‘discounted’ price of, say, 60 cents, thus getting a larger number of installs, each at a lower profit margin. Win/win for us and purchaser.”
And inevitably some developers said they would be looking more at Android for their offerings — although one recent study from Distimo highlighted just how challenging it is to get mass downloads (free or otherwise) on that platform — which makes that platform look fairly unappealing, too.
When the PPI ban first came to light in April, part of the reason for the change, it was thought, was that PPI was effectively gaming the rankings for most-popular apps in Apple’s App Store — the downloads were getting skewed by those picking up the apps in exchange for currency elsewhere, not because they were actually good apps. Ironically, a decline in popular rankings doesn’t come up as one of the casualties of the loss of PPI in Tapjoy’s survey.