Mike Hines, Amazon

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What the Top 50 Do With IAP That The Rest of Us Don't

(White Nights Conference Moscow 2016)
The official conference website — http://wnconf.com

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Mike Hines, Amazon

  1. 1. WHAT THE TOP 50 APPS DO WITH IAP THAT THE REST OF US DON’T Reach  Engage  Earn MIKE HINES DEVELOPER EVANGELIST, AMAZON @MikeFHines mikehines45 mihines@amazon.com
  2. 2. Who is Mike Hines Founder @ 2 Financial Services Startups Founder @ 2 Software Startups QA Engineer @ Now Software QA Manager, Product Manager @ Microsoft Evangelist @ Amazon.com Mentor @ GameFounders, Dev Bootcamp Games Judge @Casual Connect Indie Prize, White Nights, and Pocket Gamer Very Big Indie Pitch Speaker @ GDC, GDCE, Casual Connect, Pocket Gamer Connects, AnDevCon, White Nights, CES, PAX Dev
  3. 3. CREDIBLY INNOVATE PHOTO HERE Amazon Appstore TODAY’S AGENDA How the Top 50 Did What They Do Differently – Selling What They Do Differently – Engagement
  4. 4. SELL IN 236 COUNTRIES AND TERRITORIES
  5. 5. Android Devs iOS devs Amazon Fire OS 41% 48% 60% %DevelopersabovePovertyLine Source: Developer Economics Q3 2014 © VisionMobile, All Rights Reserved HOW DO WE GET MORE DEVELOPERS EARNING MORE REVENUE An app must make more than $500 per month if it is to fund future app development and marketing. $500 per month is the app poverty line.
  6. 6. How the Top 50 apps did vs. the rest of us
  7. 7. Cohort Analysis Group A: Top-50 Grossing Source: Amazon Appstore, March 2014 Group B: Rest of Freemium
  8. 8. Day 1: Installs Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii 100100 installed
  9. 9. Day 1: Active Users Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Iiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiii 4142 In active 5958 active
  10. 10. Day 1: Uninstalls Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Iiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii1318 uninstalled 5958 active
  11. 11. Day 1: Paying Users Group A: Top-50 Grossing iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii1318 uninstalled 5958 active 33 paying
  12. 12. 2,6 2.9 Source: Amazon Appstore, March 2014 Day 1: Engagement Group A: Top-50 Grossing iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii Group B: Rest of Freemium iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii1318 uninstalled 5958 active 33 paying # of sessions / active session length / active (minutes) × = avg. session length (minutes) 6,9 7,4 1822
  13. 13. 6,9 7,4 2,6 2.9 Day 1: Revenue Group A: Top-50 Grossing iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii =× # of items / paying 100% 112% avg. selling price 100% 136% 100% 154% ARPPU 1318 uninstalled 5958 active 33 paying # of sessions / active session length / active (minutes) × = avg. session length (minutes) 18 22
  14. 14. Source: Amazon Appstore, March 2014 1 Day Later… Group A: Top-50 Grossing ii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiii Group B: Rest of Freemium ii Iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × avg. session length (minutes) 1725 uninstalled 3437 active 11 paying =× # of items / paying 100% 106% avg. selling price 100% 107% 100% 114% ARPPU 6,7 7.7 3.2 3.5 21 27= # of sessions / active
  15. 15. 3 Days Later… Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × avg. session length (minutes) 1928 uninstalled 1923 active =× # of items / paying 100% 107% avg. selling price 100% 122% 100% 131% ARPPU 5,9 7,9 2. 6 3.2 15 25 = # of sessions / active
  16. 16. 1 Week Later… Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × avg. session length (minutes) 2032 uninstalled 1418 active =× # of items / paying 100% 102% avg. selling price 100% 121% 100% 124% ARPPU 5. 7 7,4 2. 6 3.2 15 24 = # of sessions / active
  17. 17. 2 Weeks Later… Group A: Top-50 Grossing iiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiii iiiiiiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × avg. session length (minutes) 2134 uninstalled 1014 active =× # of items / paying 100% 111% avg. selling price 100% 108% 100% 120% ARPPU 5,7 7,3 2,5 3,1 14 22= # of sessions / active
  18. 18. 1 Month Later… Group A: Top-50 Grossing iiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiii iiiiiiiiiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × = avg. session length (minutes) 2236 uninstalled 48 active =× # of items / paying 100% 103% avg. selling price 100% 128% 100% 131% ARPPU 5,9 7.3 2,4 3.1 14 23 # of sessions / active
  19. 19. Hours Since App Download IN-APP PURCHASING BY HOUR Source: Amazon Appstore, March 2014 0 24 48 72 96 120 144 168 192 216 240 264 288
  20. 20. PRICE INCREASES OVER TIME Days User Owned App 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 1 4 7 10 13 16 19 22 25 28 Source: Amazon Appstore, March 2014 +60% average selling price
  21. 21. WHAT WE LEARNED The top have higher average price points You can charge more in the right place and time. Session length and count are important Retention is not the only important metric.
  22. 22. What the top 50 do differently -- Selling
  23. 23. THE TOP DEVELOPERS KNOW THE NUMBERS ? ENGAGE CUSTOMER EARLY MAKE IT EASY TO COME BACK GIVE THEM A REASON TO COME BACK 37% of users who will purchase, purchase on the first day 48% of repeat purchases happen within one hour of a previous purchase 64% of revenue comes from 3rd order + 74% of revenue occurs after first 7 days 56% of revenue occurs after first 30 days
  24. 24. Apps with tutorials that introduce IAP items HAVE A 2.5x HIGHER CONVERSION RATESource: Amazon Appstore, July 2013
  25. 25. Apps showing users how to “consume” GET MORE REPEAT ORDERS Games that providing a post-purchasing tutorial generated 65% more repeat orders than the market average. Source: Amazon Appstore, March 2014
  26. 26. Games with bigger selection RECEIVE MORE ORDERS PER CUSTOMER Developers that add new items regularly are able to re-engage their paying customers. 1.14% of the customers generate 30% of sales. Source: Amazon Appstore, March 2014 69% 100% 145% 1-5 Items 6-10 Items 11-15 Items ARPPU by # of IAP items for sale
  27. 27. Conversion Rate INDEX: Average = 100% Don’t confuse your customer OFFER VARIETY, BUT NOT TOO MUCH Source: Amazon Appstore, March 2014 147% 101% 52% 0% 50% 100% 150% 200% 1-5 Price Points 6-10 Price Points 11-15 Price Points
  28. 28. Where do apps GENERATE THE MOST REVENUE A 2016 study by Swrve shows that disproportional revenue is generated from higher end price points. © Swrve 2016 Mobile Monetization Report – used with permission
  29. 29. To sell more IAP items, BE CLEAR ABOUT VALUE Make it obvious what the benefit is for buying different price items. Confused customers don’t buy anything.
  30. 30. WHAT WE LEARNED Games with bigger selection RECEIVE MORE ORDERS Tutorials that introduce in-app items HAVE HIGHER CONVERSION Showing users how to “consume” GETS REPEAT ORDERS Treating in-app items like a catalogue MAKES IT EASY TO SHOP 1.14% of paying customers generate 30% of sales
  31. 31. What the top 50 do differently -- Engagement
  32. 32. REDUCE BARRIERS TO FREQUENT USE
  33. 33. Tuning Game Difficulty WILL ENCOURAGE LONGER SESSIONS Too hard, and users will abandon. Too easy, and they can get bored. Just right, and it becomes addictive!
  34. 34. Engaging Community CAN CREATE BUZZ AND KEEP USERS ENGAGED This will result in more friend-to-friend marketing as players share their achievements and ranks. Players will also compete with friends and leaders and stay engaged.
  35. 35. Leaderboards and Achievements are THE MINIMUM BAR FOR SOCIAL ENGAGEMENT
  36. 36. User Acquisition Alternate Revenue Content Creation Influencers Monetization Loop Game Loop BUILD A COMMUNITY OF FANS The Top apps A fan base creates: • Influencers • Content Creators • Revenue Opportunities
  37. 37. BUILDING ADVOCATES IN YOUR COMMUNITY Example of streaming during development
  38. 38. FAN CREATED CONTENT IN YOUR COMMUNITY
  39. 39. Communities help you TAKE CARE OF YOUR BEST CUSTOMERS The top apps communicate directly with their top customers to keep them happy and engaged. © Swrve 2016 Mobile Monetization Report – used with permission
  40. 40. To be in control, HAVE A LOT OF LEVERS Measure with Analytics, and use A|B Testing to fine-tune everything from game difficulty to IAP menu choices.
  41. 41. Design IAP into the fabric of your game MAKE IT EASY TO BUY Offering ways to buy your IAP items when they are needed will increase conversion. Apps that made it easy to shop INCREASED REVENUE 75% (ARPPU) Source: Amazon Appstore, March 2014
  42. 42. WHAT WE LEARNED Add social and tweak game difficulty to INCREASE TIME AND COUNT OF SESSIONS Cater to your best and longest customers with clear value DIFFERENTIATE YOUR IAP CATALOG Give yourself control of your game in the wild IMPLEMENT A|B TESTING
  43. 43. IF YOU ONLY DO ONE THING… Cater to your best and longest customers DIFFERENTIATE YOUR IAP CATALOG
  44. 44. IF YOU ONLY DO TWO THINGS… Cater to your best and longest customers DIFFERENTIATE YOUR IAP CATALOG Make sure your IAP catalogs are CLEAR ABOUT VALUE
  45. 45. An alternative to IAP -- Amazon Underground
  46. 46. A new shopping app distributing #ActuallyFree APPS Turn 100% of your Android users into revenue-generating customers Developers waive fees on apps and In App Purchase items. Customers get #ActuallyFree apps! Amazon pays developers for cumulative minutes customers spend in an Amazon Underground app.
  47. 47. Amazon Underground HOW IT WORKS • Customers go to Amazon and download the Amazon Underground shopping app • Customers download your app from Amazon Underground • Total user minutes are multiplied by our payout ratio • Developer is paid
  48. 48. Underground In an average week: 10K Users (@9 min/day) Amazon Underground HOW IT WORKS
  49. 49. 6,9 7,4 2,6 2.9 Day 1: Revenue Group A: Top-50 Grossing iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii Group B: Rest of Freemium iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii =× # of items / paying 100% 112% avg. selling price 100% 136% 100% 154% ARPPU 1318 uninstalled 5958 active 33 paying # of sessions / active session length / active (minutes) × = avg. session length (minutes) 18 22
  50. 50. Underground In an average week: 10K Users (@9 min/day) 630K Minutes/week 630K x $0.002 = $1260 $1260 x 100% = $1260 Amazon Underground HOW IT WORKS
  51. 51. Underground In an average week: 10K Users (@9 min/day) 630K Minutes/week 630K x $0.002 = $1260 $1260 x 100% = $1260 IAP In an average week: 10K Users (@3% convert) = 300 Paying Users/week Amazon Underground HOW IT WORKS
  52. 52. 6,9 7,4 2,6 2.9 Day 1: Revenue Group A: Top-50 Grossing iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii Group B: Rest of Freemium iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii =× # of items / paying 100% 112% avg. selling price 100% 136% 100% 154% ARPPU 1318 uninstalled 5958 active 33 paying # of sessions / active session length / active (minutes) × = avg. session length (minutes) 18 22
  53. 53. Underground In an average week: 10K Users (@9 min/day) 630K Minutes/week 630K x $0.002 = $1260 $1260 x 100% = $1260 IAP In an average week: 10K Users (@3% convert) = 300 Paying Users/week 300 x $6.00 ARPPU/week = $1800 Amazon Underground HOW IT WORKS
  54. 54. Getting Started • Android • Premium or IAP in another store • Open to Devs worldwide • For customers in US, UK, Germany and France Qualifications developer.amazon.com/underground
  55. 55. Learn more: http://bit.ly/top50iap http://bit.ly/indieunderground http://bit.ly/marketingtips4apps Follow us: @MikeFHines developer.amazon.com/blog

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