Tag: google

EU regulators take action on the problems associated with mobile apps and their microtransactions

Mobile games are massively popular, but many of these games may be marketed under false pretenses that they are free. In the U.S., federal regulators are pushing for mobile platforms to curb the growing problem of young children making unauthorized purchases through mobile applications. In the European Union, regulators have begun following suit, taking steps to ensure that apps that feature microtransactions are no longer marketed as free and purchases made through these applications are appropriately authorized.

Microtransactions are leading to unauthorized in-app purchases

Microtransactions have become a very common aspect of the mobile app world. In mobile gaming, in-app purchases are one of the best ways for developers to generate revenue from their creations. In these games, players can often purchase upgrades or buy digital currency that can be used to unlock special content. Because mobile games are particularly popular among children and young adults, unauthorized purchases have become a problematic issue.

Games cannot be marketed as free if they also include microtransactions

The EU Consumer Protection Cooperation Network has determined that games that are advertised as free cannot also have microtransactions. Google, Apple, and other providers of mobile games will have to remove such games from their store platforms in the European Union. Google has had a somewhat cavalier response to the ruling and has begun taking steps to weed out such games from its store platform, but Apple has been less inclined to accommodate the new rules.

Issue has more to do with marketing rather than microtransactions themselves

The European Commission notes that Apple has yet to take any sufficient action on the matter. Apple has proposed its intention to address the issue of microtransactions, but has not yet made any effort to do so. These transactions are a major revenue stream for app stores, allowing these stores to generate profit for their parent company. Some argue that microtransactions are vital to the growth and survival of mobile games, but the issue is mostly about marketing and not about an application’s ability to generate profit.

The company’s quarterly results have revealed that it has yet to master this advertising channel.

Although Google has proudly held its position as central and key to online advertising as a whole, when it comes to mobile marketing, specifically, it is becoming increasingly clear that the search engine is having a hard time spanning the gap to the smaller screen.

Although consumers may be using their smartphones and tablets on an increasing basis, advertising to them is difficult.

Mobile marketing is not simply a matter of the same traditional digital advertising, only on a smaller screen. Formats that were used over desktops are providing an entirely different experience for smartphone and tablet users, and it’s not one that they like. The screen size restrictions and touch screens mean that old ads simply don’t carry over to the new devices. That said, Google has not yet been able to figure out exactly how to make its ad business shine as it has done for the desktop and laptop channel.

This has meant that Google is less capable of charging the same type of premiums for its mobile marketing ads.

While this has been suspected for some time now, the recent release of the company’s earnings has only underscored the struggles that the company is facing as a result of this problem. The cost per click (the amount that an advertiser pays every time an ad is clicked) fell by 6 percent in the quarter that closed in June, when compared to the same quarter in 2013. This has been blamed on the increasing shift toward mobile advertising.

The decline in the ad prices was only the latest in an overall two year trend in that direction for Google. That said, further analysis was not made possible based on the released data as Google does not provide a breakdown of ad revenue based on desktop versus mobile channels.

Google is not alone in its struggle to break through the mobile marketing challenge and come out shining. Nearly all of the major players have found that the transition to multichannel marketing that will appeal to various forms of device user has involved quite the bumpy road and that the various gadgets and screen sizes are presenting far different requirements than had been initially expected.