$142.5B 2015 U.S. ad spending for 200 LNA
At first glance, Apple's move to ban app producers and publishers from incentivizing their audiences to share, click and act seems like a strike against the ability of app makers to achieve growth. Who is Apple to say how rewards are earned?
But after some thought, I dare say Apple's ban on apps offering rewards for viewing videos or sharing via social channels -- also called "incentivized advertising" -- is a much-needed correction that will make in-app advertising a stronger and more effective tool for brands, regardless of what Apple's motivation for doing so may be.
While incentivized ads by themselves aren't necessarily bad, the way they've come to be used lately has gotten out of control. Several problems come to mind. First and foremost is the relevancy problem. With little to no insight into the person viewing the ad, often the action demanded for the reward has little relevance to the user. (For example, check out Peter Kafka's anecdote on makeup tips).
Second, a healthy percentage of incentive ads in-app are for other apps, which only distracts users from the app they're choosing to engage with. It's the literal opposite of native advertising, which aims to be present more as a service than an intrusion.
This kind of forced engagement leads to additional problems, from simply turning users off with a barrage of unwanted ads they don't like to skewing engagement and viewership stats used to artificially inflate mobile ad stats. Sure it's a quick-buck tool designed to monetize free apps, but it hurts everyone in the long run.
As this new policy rolls out and we learn more about the details, there will be no shortage of concern among app developers looking for ways to profit from their hard work. That's understandable. But this is good for everyone.
Brands only want to pay for engaged audiences they can influence with their advertising. Removing forced advertising creates a more effective environment for their ads. One hopes this will incentivize marketers to spend more on mobile apps in their advertising budget. It's encouraging to see Apple use its leadership position to take a stand.
Users don't like irrelevant interruptions to their online experience. They may put up with ads and videos that have nothing to do with them for the opportunity for free content, but they're certainly not enjoying it in any way.
Mobile advertising remains a nascent marketplace. For it to grow and become an established industry, there needs to be a greater emphasis on brand-focused mobile advertising. Apple's move may be motivated more by internal Apple goals than as an altruistic effort to support the mobile ad market. But given Apple's dominance in the app space, it's only natural that this new policy will reverberate throughout the industry and force all involved to rethink their approach.