Q&A: Fiksu CEO Micah Adler on How Acquiring iOS Users Has Changed After Offer Walls

One of the more notable beneficiaries of Apple’s crackdown this spring on paying for downloads through offer walls has been Boston’s Fiksu, a Charles River Ventures-backed company that helps developers optimize their user acquisition campaigns.

The company mediates between 20 mobile advertising networks, incentivized install companies and other methods of getting users for developers so they don’t have to stress about finding the cheapest way to bring users in the door. Fiksu’s system switches between networks in real-time, finding the optimal spend on each to gain loyal users. And by ‘loyal,’ we mean that the developer can define an event that’s useful to them like opening the app three times.

Like many companies that end up becoming ad networks or service providers in the industry, Fiksu started out building its own apps under the name Fluent Mobile. But Adler, a former computer science professor, found while struggling to market the company’s apps, there was an even bigger opportunity to solve that same issue for scores of developers.

“We were building our own news reader and we had a very positive launch [in July 2009],” Adler said. “It was app of the week. It was written about in the New York Times. We were seeing 50,000 downloads a day, but things dried out very quickly.”

That’s when the company started to tinker with ways of cheaply getting users to download its apps. They started with paying $3 a download, and whittled that down to about 26 cents. Since then, the company’s picked up some well-known brands like Groupon and Gilt Groupe, not to mention an increasing number of game developers who have had to cut their dependence on incentivized downloads cold turkey.

We talked to Adler about how the landscape has changed since Apple forced to developers to stop getting downloads through offer walls. Up until this spring, it was a widespread practice for developers to give users virtual currency if they downloaded apps from an offer wall. Other developers would pay for these downloads through networks like Tapjoy, Flurry and W3i, which operated these offer walls. (For more depth on this issue, we covered it here and here extensively.)

Q: How has user acquisition changed in the last three months since Apple cracked down on incentivized installs?

A: We’re seeing people are going beyond the download. They’re not paying attention to how many downloads they’re getting. They’re paying attention to how many loyal app users they’re getting. They want people that actually stick around and purchase things or register for services.

Q: Are there any new emerging metrics that many developers are starting to care about? 

A: This dovetails with the indices we’re launching today. One of them is a cost-per-loyal-user index. And we’re defining that as a person who launches the app at least three times. What we’ve found over a large number of campaigns is that there’s a point in the curve where users become more likely to stick around. In our system, developers can define what a successful event is for them and we can actually feed that data that back into bidding algorithm. Maybe it’s a certain number of check-ins or a purchase — whatever it is you want it to be — once it’s defined, we can hook it back into our system.

Q: Who’s benefiting the most from Apple’s policy change? 

A: As you’d expect, there’s been a huge shift from spending on incentivized traffic to spending on traditional banner ads. It’s almost not a choice. It’s more that developers are being forced to do this because there isn’t the same amount of inventory for incentivized downloads because of Apple’s policies.

The whole marketing problem for developers has actually become harder. Before, many developers were able to get to ROI-positive in their spend purely on these incentivized downloads. And once you get to that point, it’s easy to spend a lot.