I’m glad someone brought this out because I’ve been asking myself the exact same thing, in this post I’m going to talk in the point of view of a theme and live wallpaper developer and all developers that create apps without user interface.
Notification and icon ads have always been the kind of advertising that theme and live wallpaper developers use to provide free apps if they want to make a revenue out of them because those kind of apps don’t have user interface like games and other kind of apps do.
Unlike what many might think, everyday there are thousand and thousand of people downloading and using Live Wallpapers and themes, so this new policy update won’t affect good developers that make quality apps and games (because they can use other ad units like banners, for example), it will only affect bad developers that create crappy apps and spam users with notification ads all the time and good developers that create quality Live Wallpapers and Themes (and the bad ones too, of course) and provide them for free in the Play Store for everyone to download.
Some of you may argue with me for what I’ve said here saying that if the theme or the live wallpaper is so good, why won’t those developers sell their apps instead of offering them for free with ads? That way Google’s new policy won’t affect them. That’s right and a fair point, but not all Live Wallpapers are able to get as popular as Paperland and not all themes get as popular as Stark either, to mention an example, so notification and icon ads were a good way to make revenue even with a respectable user base. Even though, not all people are willing to pay for a theme or a live wallpaper because they don’t think it’s worth it even if is something they use and see everyday because is running in the background all the time.
Apart from that, Google doesn’t currently allow developers from all countries to upload paid apps so many don’t get the chance to do that so all that’s left for them is to publish free apps with or without advertising.
In the same regard about paid themes and live wallpapers, only the ones that get popular are able to make good revenue for their developers, but you can still offer your theme for free and you might even get more downloads than the paid ones just because yours are free and theirs are paid. And even those live wallpapers and themes that didn’t get the amount of users the popular ones do, their developers were able to get good revenue from advertising, more than they would get if they sell them because then again, most users don’t want to pay $0.89 or more for a theme or a live wallpaper because “is not worth it”, they don’t know and appreciate all the hours and hours of coding and designing that are behind those “simple” apps.
Here’s also a picture I just came across today that backs this point I’m making, free apps with advertising make more money than ad-free paid apps.

I know notification and icon ads might be annoying for users so this move Google is making will make all of them happy because they don’t have to worry about those and some people also claim that finally all the “spam” is going to stop, referring to notification and icon ads.
But notifications ads aren’t only used to spam users, there are good developers that set a respectable amount of time before a push ad is sent to an user so they wouldn’t get bothered about them like for example one push ad every 3 or 4 days, it might seem as too much but it really isn’t, and a notification ads is something an user can clicks if he’s interested or just swype away to clear (even some users use apps to block this kind of ads). I personally believe that if Google wants to make something about push ads it should be to force developers not to send too much push ads because there are some that really spammed users by sending them one push ad every 12 hours, that’s way too much!
Icon ads are even more easy to delete if the user isn’t interested in what they offer, and one thing I’ve always liked about StartApp is that they show the user an Opt-In window when the user opens the app, that way the user knows exactly he’s going to get an icon in their home screen if they agree or they can just as simply uninstall the app if he doesn’t want ads, that’s it.
Some of us use Startapp combined with an ad network that offers notifications ads like Airpush, for example, so I’m unsure whether to update my apps (when a new ad sdk is provided, of course) or start all over again by taking them down and publishing a new one.
I’m not sure if what I’m posting here next is accurate so if someone can help me understand this it would be great, this is what I think:
If I take my apps down and upload a new one, that means I can profit from notification ads from Airpush for a while until all users uninstall the app because there won’t be an update removing the ads. But, and this is a major “but”, I’d loose all of my users and a new app really means to start all over again from zero.
If I update my apps removing notification and icon ads, that means that I should have changed the ads sdk of my apps so they are compliant with Google’s new policy but if Ad companies can’t come out with something similar to notification and icon ads that doesn’t guarantee that my revenue will be the same or even higher, so I might as well play safe for a little while with option number one profiting less with the current users.
But since the policy changes are only for Google Play, downloads from other Android Stores won’t be affected, isn’t that right? so I would still have new users that will get notification and icon ads. But lets face it, nearly the 100% of my downloads come from Google Play so this really doesn’t change much, I don’t know about other developers because the Amazon Store is used by a lot of people too.
I’m waiting to see what Startapp, Airpush or any other ad network will offer us now, I wouldn’t want StartApp to change the model they have (pay per download) or to get out of business because of this.
If no Ad network is able to come out with something that works as well as notification and icon ads in themes and live wallpapers, then Google might just as well killed the free personalization apps in the play store, there are only going to be paid ones (that some developers can’t upload because of Google’s restrictions regarding the country they live) and free ones that developers make just for fun and for other users to enjoy.
I don’t know if it’s just me or not, but I’m really sad about this move Google has made, I think the points I make here are valid and I really hope Google backs off on this or many developers won’t have an incentive to develop android themes and live wallpapers anymore.
I’m sorry this message came out this long, I didn’t meant it to be that long.
PS: If someone knows a kind of advertising that works well with themes and live wallpapers, please share the info here with all of us, I would really appreciate that, I’m currently searching and searching on new ways to monetize and waiting for the current Ad networks I use to give some info, since notifications and icon ads are doomed.