Tapjoy Launches Pay-Per-Action Mobile Advertising as Installs Get Crowded

Tapjoy, which rehabilitated itself by shifting its attention onto mobile platforms from Facebook, is looking to keep its edge in the app promotion space as new competitors emerge.

The San Francisco-based company has launched a pay-per-action advertising network that lets developers promote their work to new users and only pay when they make certain actions or reach a higher level in a game.

It’s a more refined approach to how the company’s advertising has worked in the past. Tapjoy built its name and network by letting gamers earn extra virtual currency in mobile apps if they install apps from other developers. Unlike other mobile advertising, they charge per install, not per impression or click.

Pay-per-action goes a step further, ensuring that when new users download an app, they actually play it. (We’ve seen variants of this model in the past on the Facebook platform through another company, Nanigans.)

With thousands of apps in the company’s network, the accumulated purchasing power of Tapjoy’s users can push a new app into the top echelons of the charts.

Developers are free to choose whatever action they want to pay for — whether it’s watching a tutorial or leveling up in the game. Price per action depends on how aggressively other developers bid for inventory.

Tapjoy also said it has partnered with Apsalar to provide analytics, a gap in its offering. Apsalar offers path analysis, which visualizes how users travel through an app and shows the percentages of people that take different actions inside a game. It also shows cohort analysis, which can help a developer understand whether a tweak has improved conversions among new users from week to week.

While Tapjoy is the largest in the installs space, the business model has proven so lucrative that it has attracted other companies like Flurry, W3i and Mdotm. Flurry is Tapjoy’s most formidable competitor with a large network of developers from when it was solely focused on analytics. Since then, it has launched AppCircle, a similar recommendation technology that offers incentivized installs.

Apple appears to be tolerant of these cost-per-install networks while Android’s Eric Chu expressed distaste for them at our event Inside Social Apps last month.