In recent weeks the iOS app market has been torn between conflicting signals that are coming from its two major players – Facebook and Apple. While there is clear evidence for these signals being interconnected, if they were to materialize they are likely to affect a good deal of iOS developers and tilt the wider app market dynamic. Here we are laying out these signals and discussing their possible effects.
Last October, Facebook introduced a new feature for mobile app ads aimed to help developers drive engagement and conversions within their apps. In April of this year, Facebook launched AppLinks.org, a new initiative to make deep-linking between native apps easier for developers.
More recently, Facebook announced its updates
to the advertising feature that promotes application installs
inside Facebook’s mobile app. The Mobile App Ad For Install takes users directly to the apps’ respective pages in the Apple App Store or the Google Play.
On June 12, Facebook wrote on its blog:
“We are now aligning mobile app ads to other ad formats by 1) having them be connected to a Facebook Page, 2) adding social context (e.g. indicating when a friend likes a Page) and, 3) adding like, comment, and share buttons.
Finally, Facebook’s Open Graph feature allows apps to publish Facebook stories on its users’ behalf, which automates the process of sharing and putting the app in front of more potential users.
The idea behind these Facebook’s initiatives is to help developers reach the right audiences, at scale, but also to retain user attention. At first sight, everyone wins: developers benefit from greater user acquisition opportunities; users come across more apps that are relevant to them; and app stores get higher traffic.
AOL, Google, Twitter and Yahoo are also jumping on the bandwagon and introducing advertising products for apps.
But some of these features are no longer for developers. Facebook has begun to take on a huge monetization opportunity that it has been gathering at its doorsteps. For example, it has been reducing the impact
of organic reach on user timelines (this applies to all companies, not just apps). While for many app developers this loss of organic reach before the end of the year would not have a devastating impact as many of them are already working with many paid engagement channels; it is likely to come as a shock to smaller companies that do not have budgets allocated to marketing and advertisement.
So for larger apps, the loss of organic reach would be compensated for with ads - if it was not for Apple’s new approval policies.
As part of Apple's latest guidelines for iOS developers, the App Store started banning apps that include features to promote their apps and enhance monetization. (the App Store guidelines have always had rules against promoting other apps and include functionality that might compete with the App Store.) Developers report that the App Store has rejected apps that use incentivized video viewing, rewarded social sharing, or include discovery tools that allow users to find apps inside other apps.
These changes followed shortly after Apple revealed new features to its app discovery process, including the search of apps by trending keywords, by category and subcategory, by related search terms, and more. These changes together appear to be aimed at apps that promote other apps in a way that makes them compete with the App Store for discovery and traffic and subsequently unduly influence App Store rankings – something that the company is highly protective of.
What’s behind Apple’s new policies?
Apple's crackdown on certain advertising methods used by app developers may be related to the upcoming release of iOS 8. Among other features, iOS 8 will include an improved App Store search algorithm, an "Explore" feature, app bundles offered at a discount, and TestFlight beta testing for developers.
But equally, one cannot help reading between the lines. The seemingly minor rule in the approval policies has already been seen as a warning to Facebook, which has been continuously working to enhance its ability to promote apps, drive traffic and resolve the discoverability puzzle. Apple seeks to defend its position as the dominant app discovery field, and Facebook and app install ads pose direct competition to it.
Here at Priori Data, we will continue analyzing Apple’s steps: after all Facebook acts as a great resource for the developer community and a source of traffic to Apple’s App Store. According to Facebook, in the past 30 days, it sent users to the Apple App Store and Google Play 146 million times, via clicks from channels such as newsfeed, timeline, bookmarks and App Centre.
Sad news for iOS developers
Having an app published in the Apple App Store has been historically difficult. The store is known to use high quality standards and be ardently curated. It is not uncommon for apps to be rejected a number of times before getting published.
Apple’s new rules can be a big deal for developers, many of who rely on Facebook adds to gain customers and on “incentivized” videos to turn their free apps into paid. It is still too early to make any predictions, but it is not unlikely that as app developers find it even more difficult not only to achieve growth and scale on iOS, but to get their apps published in the App Store in the first place, they are likely to move to less curated platforms – primarily, Android.
For Facebook the impact might be of a totally different scale: it could knock a big chunk of its ad revenue offline.
If Apple or Google want to, they can
While there are a lot of open questions around recent news both from Apple and Facebook, one thing is obvious for now: these developments show how easily the app industry can be reshaped if one of its major players, Apple or Google, which control the platforms the apps run on, want to change the ground rules overnight. And oh they can.
But can Apple really make everyone in the market dance to its tune? A good indicator of the extent of the market influence consolidated in the hands of its main players, would be looking at the bigger names. For example, King's most popular game, Candy Crush, asks people to share on Facebook to get more lives. Would these top games and other large publishers that use these practices also have to adhere to Apple's latest policy updates, or would they'll get a pass?
The reasons behind Apple’s recent move are likely to be complex - stretching far beyond app discovery ownership – and so would be its implications. We will continue to explore both in upcoming posts.
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