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How will Google's policy changes shake up the Android advertising ecosystem?

How will Google's policy changes shake up the Android advertising ecosystem?
August is supposed to be a month where nothing significant happens.

This August seemed typical for Android app developers until Google announced policy updates to the Google Play Developer Program Policy.

Though there were a range of policy changes and updates, including the enforcement of payment via Google Play's payment system, the new policies with the greatest impact on developers based on the Android community conversations this past weekend are the following:

System interference

  • An app downloaded from Google Play (or its components or derivative elements) must not make changes to the user's device outside of the app without the user's knowledge and consent.

  • Apps and their ads must not add homescreen shortcuts, browser bookmarks, or icons on the user's device as a service to third parties or for advertising purposes.

  • Apps and their ads must not display advertisements through system level notifications on the user's device.


Ad Policy

  • Ads Context - Ads must not simulate or impersonate the user interface of any app, or notification and warning elements of an operating system.

  • Ad Walls and Interstitial Ads - Interstitial ads may only be displayed inside of the app they came with. Forcing the user to click on ads or submit personal information for advertising purposes in order to fully use an app is prohibited. A prominent and accessible target must be made available to users in any interstitial ad so they may dismiss the ad without penalty or inadvertent click-through.

  • Interfering with Apps and Third-party Ads - Ads associated with your app must not interfere with other apps or their ads.


Big shake up

Google policy changes were clearly designed to clean-up the Google Play ecosystem of apps whose main purpose was to serve as marketing vehicles for other apps or services.

Apps which generated revenue by adding other icons or browser bookmarks when downloaded and apps whose push notification messages were ads for other apps will no longer be allowed in Google Play after 21 September 2013.

And so the Android communities have been buzzing with heated discussions as many developers express concern over the revenue loss they'll experience once Google's new policies take effect.

This isn't only an issue for illegitimate or spam-y apps, though.

It's important to note that many legitimate and respected developers of popular apps who utilized monetization services which were previously accepted are now looking for new sources of revenue to make up for the revenue streams they'll soon lose.

For some of them, it was over 70 percent of their ad revenue.

Looking ahead

Yet, I believe these changes are great for the Google Play ecosystem, users and mobile app developers.

Cleaning up the ecosystem will mean that there will be significantly higher quality app content, which will lead to more frequent use of the apps.

A cleaner Google Play will encourage users to download more apps, eliminating concerns that users previously had about spam-y apps, and ultimately increase the revenue potential of each of the apps in the marketplace.

For example, let's say an app previously generated $10 for 1,000 installations (of a third party app which is no longer allowed) and whose concern was purely in driving the new app installs. Now, that same app is required to provide better and more engaging content in its app.

By implementing a few simple changes, the app developer can encourage those same 1,000 users to return and use the app several times by creating fresh content and reminding the users to experience new content through system notifications.

The developer can now show these users in-app offers through banners or interstitials each time they are using the app.

Even if the developer has minimal success and during the lifetime of the app, the user visits the app 5 times and sees 5 ads each time, the app developer will earn at least a reasonable $1 CPM, which translates to a total of $25 for the same 1,000 downloads, a 150 percent increase in revenue.

All about engagement

Though Google's policy changes are intended to weed out apps created to market other apps, many legitimate developers signed up for these monetization services to make easy money, as noted above.

Developers looking to offset their lost revenue can find new revenue streams from banners, interstitials, or video ads as well as from in-app purchases.

If app developers focus on improving their content and user engagement, they'll create new app discovery opportunities and generate greater in-app revenue, which I believe will more than offset the revenue loss resulting from Google's change of policy.

Elad Natanson is a veteran online advertising and games industry, and is the founder of Appnext.

You can reach him at: @eladnat

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