More Details on Tapjoy’s New Direct-to-Consumer Play — A “Personal App Marketplace”

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By Kim-Mai Cutler Comment

Last week we reported that Tapjoy, which runs the biggest network that drives downloads for mobile developers, was launching its own gaming platform to have a direct relationship with customers and more control over its own destiny.

Today we have more details as the San Francisco-based company finally took the covers off a web-based “personal app marketplace” that lets consumers find new apps through friends or personalized recommendations based on their play history.

“We really need a better, more personalized way to find apps that your friends are excited about,” said Peter Dille, the company’s chief marketing officer. “This is a way to get something that’s tailored directly to you. The service understands what you currently like, what you currently play and it can make recommendations based on Tapjoy’s long history in the mobile apps space.”

Tapjoy, which once operated on the Facebook platform under the name of Offerpal, has had a long history in seeing its business rise and fall under the whims of platform operators like Facebook and Apple. Most recently, its business on iOS came under pressure in April after Apple began rejecting apps with Tapjoy offer walls, because it said they were having an undue influence on chart rankings. Two years ago and under different management, the company came under fire on the Facebook platform for not properly managing the quality of its offers.

Having a web-based marketplace is a way to have a direct connection with consumers and reduce the risk that a middle-man or platform operator could shut down the company’s business — again. It also allows Tapjoy to run offers again for iOS games while making it much harder for Apple to control the practice. Because the company raised $51 million in two venture capital rounds this year from JPMorgan, Rho Ventures and others, it needs to make its business model more defensible from policy changes by Apple, Facebook or Google.

The new platform will have a variety of ads, ranging from video interstitials to incentivized ads that reward gamers with virtual currency if they download or take certain actions in apps from other developers. These were the types of ads that Apple was unhappy with. Tapjoy keeps track of which users have taken which actions on its platform, so the virtual currency rewards will automatically get added to their game of choice the next time they open it on iOS or Android. Rewards can either be for earned or premium currencies (the kind a user must pay for).

“There will be CPA (cost-per-action) ads that involve an action, video ads and some that involve in installation. They run the whole gamut,” Dille said. When users are asked to download apps, they’ll be referred to the correct app store whether its iTunes or Android Market. Tapjoy won’t earn affiliate fees for driving downloads of paid apps.

Other features include social recommendations based on what friends play and there will be editorial picks based on what Tapjoy employees recommend.

Like Facebook, Tapjoy is taking the HTML5 runaround in trying to reach customers through its new mobile platform. Gamers have to go to Tapjoy’s URL and add the site as a bookmark on their phone. It’s an installation process with slightly more friction.

“We’ve actually seen healthy conversion rate in our early testing,” Dille said. “Of course, this is among are core users, who are our best customers. They’re pretty familiar with how to get around on mobile devices. But we’ll keep working on it as we expand to more casual users.”

The company’s not relying on third-party developers to market the platform. It’s doing this itself through its forums, boards and its Facebook Page, which has more than 1 million likes. They’ll also be looking at search engine marketing. Marketing the new platform should be easier on Android, since Tapjoy’s install network is still growing there while the company’s iOS business had dwindled in the wake of Apple’s crackdown.

Countless companies have tried to attack the app discovery problem from gaming networks like OpenFeint, PapayaMobile, DeNA’s Mobage and Heyzap to standalone discovery apps like Appsfire and Discovr. Facebook is starting to make a big push in this area with its own HTML5 mobile app platform. Tapjoy may not have the 800 million monthly actives Facebook does, but it does have longstanding relationships with most of the top-grossing developers in the space.

The company says it has 10,000 apps in its network and 35 million monthly actives.

“Tapjoy’s brand has always been behind a B2B (business-to-business) strategy,” Dille said. “What this launch does is bring Tapjoy directly to the forefront.”

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