Application giants like Tapjoy, Flurry and AdMob have seen profits threatened by Apple's decision to implement a ban on pay-per-install in-app advertising.
The applications work by encouraging users to install other apps via in-app incentives, with developers of the original then taking a share of the new profits. The problem is that Apple sees this as unfairly manipulating chart rankings in its app store.
Last month, Apple began turning away pay-per-install apps and updates to great criticism from within the application industry. A Tapjoy survey of 496 developers found two thirds were reporting 20 per cent of revenue was previously generated from pay-per-install applications.
Apple has not been totally clear as to exactly why it has begun restricting the apps, pointing to clause 3.1 of the Apple developer program license agreement: “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.”
It appears to be that Apple is trying to protect application quality and ensure the top apps in the store are worthy of their position.
One way that pay-per-install apps generate attention for other content in the app store is by offering in-game currency to users who download in-app. Tapjoy is fighting its corner by saying that of the developers asked, a quarter were receiving "way too many complaints" about the lack of it.
Android provides relatively more advertising freedom to developers when compared to Apple, so we could see the move generating a shift towards the Google platform.
Do you like buying apps within apps? Or should Apple stand their ground?