Mobile app distribution evolves in the wake of Apple’s incentivized install ban

Apple’s (s aapl) ban on incentivized installs of mobile apps, once a growing model for app distribution, has killed off one tool for iOS app marketing, but the need to get apps noticed and distributed hasn’t gone away. In fact, with the App Store closing in on half a million apps, it’s only become more imperative.

That reality is pushing app distribution and monetization companies to continue to evolve around Apple’s ban. W3i, once a leader in incentivized installs, has come up with a new alternative app discovery service that it hopes will aid game developers to push downloads while staying within Apple’s rules. The new product, called Mobile App Ad Network, allows game developers to offer their apps for free for a 24-hour period in customizable banner ads that appear in other gaming apps. The new “free app of the day” ads are going into beta today.

Advertisers and publishers have a number of options as to when and where they run the ad so that it is most effective. Instead of just a persistent banner, an advertiser can have the offer run when the app is launched, when the user hits a milestone or in exchange for an achievement. This targeted use of the ad means it works more within the flow of an app and is less intrusive. And because it only advertises free games for one day in other games, it is more likely to be downloaded because it is more relevant to the target audience. W3i said this model can boost conversions to 48 percent, though we will have to see if that bears out over time.

W3i believes the new ad product won’t run afoul of Apple’s ban on incentivized installs because it is basically a banner ad for an app that is on sale. Incentivized installs, which allowed a user to download an app in exchange for virtual currency or goods, was targeted by Apple for apparently gaming the App Store rankings, boosting apps that paid for those ad campaigns.

“It’s difficult to predict Apple’s behavior but they have no problem with recommending apps and they have no issues with publishers putting their apps up for sale,” said W3i product manager Melissa Johnson.

Johnson said that incentivized installs also enticed people to download unrelated apps they may not have been interested in to gain virtual goods. By offering games that may have appealed to a gamer, they increased the chances that the user would continue to engage with the app, making the investment more worthwhile for advertisers.

W3i’s product illustrates how the mobile app distribution market is shifting in response to Apple. Tapjoy, another leader in incentivized installs, said it has had to move away from pay-per-install campaigns on iOS, and it now targets other platforms and runs more cost-per-action ads, which allow users to gain currency in exchange for watching a video. It is also doing more-traditional banner ads for apps, Tapjoy’s CEO Mihir Shah recently told me.

This new campaign by W3i shows that mobile advertising is also becoming more contextual, something I’ve noted with products like Kiip and Tap Me, which use very targeted moments in apps to offer up real rewards or sponsored in-game power-ups. There is more creativity happening now in mobile advertising, some of it by necessity in the case of W3i. With a booming market for mobile apps, the marketing of those apps is a big opportunity that can’t be ignored, and marketing will always find a way.