09/06/2013 11:56 am ET Updated Nov 06, 2013

App Engagement Is the New Discovery

A week ago, mobile ad network Fiksu reported that Apple was running tests to incorporate star ratings in its App Store ranking algorithm. This sparked a healthy debate in mobile and tech circles about the potential implications of the decision, assuming it comes to fruition. How would it change the rankings of existing apps? Who would it benefit most? And could the solution be gamed?

So far, the reactions have been mixed, if slightly on the negative side. Many long-tail developers are complaining that this decision will not improve their competitiveness against more established companies. Others point out that ratings can be gamed simply by paying for 5-star reviews, as many apps already do. Still others are skeptical that ratings are an accurate measure of quality.

What happens with ratings, however, is less important than the signals that Apple is sending to the mobile community. The company has been experimenting a lot these days with its App Store ranking algorithm, using tactics like placing greater weight on newer app versions and slowing down the time between apps changing position. By running these tests, Apple confirms its need to do a better job surfacing high-quality apps, as this will protect its position as the premium app ecosystem and fend off competitive pressures from Google Play. While it can't prevent all spam, it can certainly make it more difficult to circumvent its rules.

The problem with Apple's current ranking algorithm is that it relies too heavily on popularity (download volume) and velocity (number of downloads in a given time period). Neither of these measures are the best proxy for relevance, given that both can be influenced by purchasing mobile ads. While adding ratings to the mix won't solve Apple's challenge, it will make a tangible difference. With every new data point that Apple adds to its equation, it becomes more difficult for spammers to artificially inflate their rankings, both from a resource and cost perspective.

Now, imagine if ratings aren't the only change that Apple has planned. What if the company improves its algorithm with metrics that approximate the quality of an app's user experience? It may sound far-fetched, but it really isn't, especially given the rumors that Google Play is already doing this. Consider the following metrics -- collected by almost every third-party tool -- that are commonly used to measure engagement:

- Retention rate (daily / weekly / monthly)
- Number of app sessions (in last 30 days)
- Average session length
- Average revenue per user (ARPU)

Adding these to Apple's App Store algorithm, in addition to proprietary metrics like app download history, would result in a profound change in app rankings. All of a sudden, apps that sell themselves well would not be as prominent as those which are used more. This would force app developers to create a better, more relevant and more engaging experiences, leveling the playing field between small indie outfits and large app publishers.

It would also mean that engagement is a prerequisite to discovery.

To get people to discover an app, mobile marketers would first need to make it worthwhile to use, and then invest time in managing user relationships post-install. Segmentation, multi-channel messaging and other mobile marketing tools that promote habitual usage and overcome issues that product alone can't solve (eg limited screen real estate, low attention spans) would now be cost of entry.

It will be interesting to see Apple's decisions over the next few weeks and months. Algorithm tests aside, the company is also launching a series of new features in iOS 7, including AirDrop (social sharing) and iBeacons (micro-location). Data from these tools could conceivably be incorporated into App Store rankings in the near future.

Looking at the big picture, it's becoming clear that app engagement is more important than ever before. In fact, it can no longer be ignored. To keep reaping the benefits of the mobile opportunity, mobile marketers need to go back to the basics: build a great product, position it to the right audience and then proactively manage customer relationships. Following these simple rules will not only secure high app ratings, but also ensure better visibility in the App Store.