Rewarding Loyalty

May 3, 2011


Recently prominent developers and analytics firms began to notice something different with App Store rankings. It seems Apple has changed their algorithm to favor stickiness over download rate.

The dominant theory amongst developers is that this is Apple's reaction to pay-per-install apps. Basically pay-per-install services allow users to download a new app from within an app they already own. This works especially well for gaming apps, which incentivize the download by offering game credits in exchange for installation. Marketers use this method to drive downloads.

With over 350,000 apps in the market,this scheme helps new apps to penetrate the ecosystem.  Inside Mobile Apps'Kim-Mai Cutler is quick to point out that the new algorithm will likely "make it harder for brand new apps to be discovered because the rankings will favor longstanding apps that already have a large, existing base of users."

Currently, Facebook is the number one app, an app that users tend to launch with some frequency. According to the new model, it seems unlikely that the Facebook juggernaut will be dethroned anytime soon.  That being said, the new weighting system seems to reward quality apps.

How many times have you downloaded an app only to: a) forget you have it entirely, or b) immediately delete it? Apple has long stated its dedication to maintaining the quality of content in the App Store and cracking down on developers who could be 'gaming the system' is an extension of that.

Apple has been far more concerned with uniformity and content control than marketplace rivals like Android, which opts for a crowd-sourced method of quality control. It functions more like a free market, where users rate and vet apps through their usage habits. Buggy apps are reported by users or are naturally pushed out of the market. One could argue that Apple's new algorithm co-opts elements of this model by valuing stickiness.

Amazon by comparison has found a bit of a middle groundbetween the freewheeling ways of Android, and the strict controls heralded by Apple. Amazon's Appstore, like Apple, weeds out buggy or predatory apps and does not allow explicit content.

However some argue that the real reason for Apple's switch has more to do with the bottom line than it does with eliminating bottom tier apps.

In-app downloads effectively circumvent Apple's in-app purchase fee, Giga Om's Ryan Kim explains, "With pay-per-install, [developers] don’t pay anything to Apple. Had a game developer just used in-app payments to sell virtual goods instead of incentivized app installs, they would need to fork over 30 percent of the in-app purchase to Apple."

As with most moves by the tech giant, the algorithm change will likely lead to a better App Store experience for consumers who will see higher caliber applications and more usage relevant rankings. Meanwhile, advertisers will once again need to recalibrate their efforts to meet Apple's demands.