iPhone AppStore Secrets - Pinch Media

‘AppStore Secrets’  (What We’ve Learned From 30,000,000 Downloads)   Greg Yardley  Co‐Founder & CEO  greg@pinchmedia.com  646‐330‐8540 

30,000,000 Downloads?!  (Actually, it’s a fair bit more than that by now.)  • Since AppStore launch, Pinch Media has provided  developers with an analyUcs library to monitor app usage  – unique users, sessions, usage Ume, etc.   • Since AppStore launch we’ve also been collecUng every  bit of detail possible from the AppStore – rankings, price  changes, you name it – and tying it back to our analyUcs.  • Our stuﬀ’s in a few hundred applicaUons right now – it’s  been in the #1 free and paid applicaUon several Umes  each, and has been in at least ten of the top 100 free  applicaUons for a while now.  • With all of this data, you learn a few things.   

ApplicaUon Rankings  (How does the AppStore work, anyway?)  For every ranked list on the AppStore, here’s a good  rule of thumb:  24‐hour   rolling window   of units downloaded  (So bunch up your publicity.) 

What do you get by appearing on a list?  • Appearing on a top 100 list increases daily  new users by an average of 2.3x.  • Greater gains result from appearing in the top  25 and top 10 lists – more variable, but oaen  an order of magnitude.  • However, it’s not permanent.  Apple’s  AppStore is structured for maximum turnover. 

Case Study A: Well‐Timed Price Cut 

Case Study B: Not‐So‐Well Timed 

Case Study C: CounterproducUve? 

In general…  • Don’t mess with a posiUve download trend.  • Decreasing price is oaen worthwhile.  • Aaer you’ve been broadly exposed,  experiments have less eﬀect.   The average price cut increased demand by 130%.  The average price increase drops demand to 25%. 

What do I need to get on a list?  For free applicaUons:  Top 25 Top 100 six months ago 10,000 1,000 three months ago 11,000 1,500 today 20,000 5,000 (Apple had a big Christmas!) 

Case Study D: Happy Holidays 

Do I have a community?  (aka ‘How much is my app used?’)  • So you’ve got a million downloads – congrats!   But what percentage use your applicaUon the  next day?  The day aaer?  • The biggest applicaUons in our system have  +3MM downloads – but what kind of acUve  user base does a download translate into? 

Free ApplicaHons ‐ Usage Over Time  25.00%  Users Returning (% of Day 0)  20.00%  15.00%  10.00%  5.00%  0.00%  1  11  21  31  41  51  61  71  81  91  Days Since First Used 

Paid ApplicaHons ‐ Usage Over Time  35.0%  Users Returning (% of Day 0)  30.0%  25.0%  20.0%  15.0%  10.0%  5.0%  0.0%  1  11  21  31  41  51  61  71  81  91  Age Since First Used 

ApplicaHons By Category ‐ Usage Over Time  30.0%  Entertainment  Users Returning (% of Day 0)  Games  25.0%  Sports  Lifestyle  20.0%  UUliUes  15.0%  10.0%  5.0%  0.0%  1  4  7  19  25  28  31  37  49  55  58  61  67  79  85  88  91  97  100  10  13  16  22  34  40  43  46  52  64  70  73  76  82  94  Days Since First Use 

In other words…  • Users stop using the average applicaUons  prely quickly.  Long‐term audiences are  generally 1% of total downloads.  • Paid applicaUons generally retain their users  longer than free applicaUons, although the  drop‐oﬀ is sUll prely steep.  • Sports seems beler at retaining users over  the short term; entertainment at retaining  users over the long term.   

How long are they using it?   • For certain applicaUons, the length of Ume  users use the applicaUon is important.   • Branded applicaUons care deeply about  engagement.  • ApplicaUons showing ads periodically also care  about session length, for obvious reasons.  • In general, every second the app’s open is a  second it can be seen by or recommended to  others.   

So should I give it away or not?  • Anyone browsing the top free applicaUons  knows that adverUsing is an opUon.  • The biggest player is AdMob, but Pinch Media  has some partnerships with ad networks that  supply some of these ads.   • However… I used to be much more  enthusiasUc about adverUsing than I am today.   Here’s why: 

Total ApplicaHon Runs Since First Use  12  10  Total ApplicaHon Runs  8  6  4  2  0  1  11  21  31  41  51  61  71  81  Days Since First Use 

Average ‘free vs. paid’ raUos:  • for total unique users:  7.5 to 1  • for total number of Umes used:  6.6 to 1  • for total Ume spent using the applicaUon:  3.9 to 1   

ExtrapolaUng…  • Assume free applicaUons are run, at most, a  dozen Umes per user.  • We see free applicaUons run, on average, 6.6  Umes as oaen as paid applicaUons.  • A paid applicaUon returns at least $0.70 / user.  • Doing the math – 12 x 6.6 = 80 sessions.  • Can the average applica/on make more than  $0.70 oﬀ adver/sing in 80 sessions?    

Answer: Hell no.  Earning $0.70 in 80 sessions requires revenue of  $8.75 per thousand runs.  If you can show one ad per session, that’s an  $8.75 CPM.  Right now, with the ad market how it is,  adverUsing rates of $0.50‐$2.00 CPM are  much more typical.  The typical applicaUon would have to bombard  its users with ads to beat the money it’d make  from paid sales.     

But adverUsing isn’t always a bad idea.   • Some applicaUons beneﬁt from network  eﬀects, and get far more than 6.6x the users  they’d get if they charged.  • Some applicaUons are excepUonally ‘sUcky’ –  users use the app far more than average.  • Some applicaUons – generally, ones catering  to people with money – can command beler  adverUsing rates than usual.  

CumulaHve ApplicaHon Runs Since First Use, By Decile  45  40  35  30  ApplicaHon Runs  25  20  15  10  5  0  1  6  11  16  21  26  31  36  41  46  51  56  61  66  71  76  81  86  91  96  Days Since First Used 

CumulaHve ApplicaHon Runs Since First Use, By Decile  CPM  45  < $2.00  40  35  30  ApplicaHon Runs  25  20  15  ~ $7.00  10  ~ $15.00  5  ~ $35.00  0  1  6  11  16  21  26  31  36  41  46  51  56  61  66  71  76  81  86  91  96  Days Since First Used 

To sum up…  • Only a few (<5%) high‐performing applicaUons  are suitable for adverUsing right now, and you  don’t know if you’ve got one unUl aaer launch.   • In other words ‐ unless there’s something  inherent about the app that screams free, sell it.  • Install analyUcs in your applicaUon and watch  your sessions per user over Ume.  Within a few  weeks, you’ll know if you’ve got a sUcky  applicaUon.  • Only release an ad‐supported version when you  have data strongly indicaUng success. 

Again, summing up ‐  • Usage Ume declines by almost a third in the  first month aaer use, stabilizing at just under  five minutes.   • Paid applicaUons see slightly more use soon  aaer installaUon, and are used for slightly  longer periods.  • The biggest usage differenUator is category –  games are used for longer periods than any  other type of applicaUon. 

This was actually a sneak preview  • AppStore‐wide reports are being generated  daily and will be incorporated into Pinch  Media’s reporUng site in the near future.  • Any applicaUon using our analyUcs library and  acUvely sending in data gets access to all  ecosystem‐wide reporUng for free.   • Pinch Media wants to know what else you  want baked into this reporUng. 

QuesUons?  You can always reach me at:  greg@pinchmedia.com  646‐330‐8540  If you’ve got a technical quesUon,   support@pinchmedia.com goes to the  enUre company.  You can see a demo at demo.pinchmedia.com, or  just get started at developer.pinchmedia.com. 

iPhone AppStore Secrets - Pinch Media

by Pinch Media on Feb 18, 2009

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