Archive for the ‘apps’ Category

Appsfire CEO Explains: Here’s How Apps Win

Wednesday, June 27th, 2012

The world of apps is very hard to navigate. It’s a bit of a mystery how certain apps win. And yet it’s an enormous business.

To find out more about how apps are promoted and what wins, we spoke with Ouriel Ohayon, founder & CEO of Appsfire, a company that helps developers promote their apps. The Appsfire app helps users discover and find apps. And Appsfire does deals, promoting specific apps.

Here’s what we learned:

  • There’s a multitude of marketing channels for apps, and promoting an app is still more of an art than a science.
  • Incentive download networks are very effective at driving downloads, but the users end up less engaged. “You get a bunch of downloads, but of users that aren’t worth much, because they aren’t going to use your app.”
  • The market for apps is still very lively. “It’s like there’s infinite demand for new and interesting apps. People just have an appetite for that. Downloading an app is like turning on the TV to see what’s on.”
Here’s the interview, edited.

BI Intelligence: Please tell us about your company, Appsfire.

Ouriel Ohayon: We help people find great apps, and help app makers promote their apps.

We have 16 employees, 10 in Paris and 6 in Tel Aviv.

We have 6 million users, mostly in the US and Western Europe. We’re starting to grow in Asia. Our app has a very high rating: 5 stars on average with 3000 ratings, maybe only 100 apps have such a high rating.

On the business side, we have around 250 paying customers, which includes all of the biggest app developers: EA, Atari, Disney and more. We do app promotion. Our revenue is up 10 times from last year–we didn’t do much revenue last year, but it’s still a good start. We’re seeing exponential growth, and unless we decide to invest massively we’ll be breakeven soon.

We used to be known for our app, but now we’re launching a partners network, exporting the Appsfire experience in other apps–think of it as AdSense for apps. We already have 3 live partners: Dolphin Browser, Textplus, and Uber Media.

BII: Given your expertise in the area, can you walk us through the main distribution channels for apps?

OO: Sure.

The app store sucks for developers because they don’t have control. It’s a store, and the store owner decides what to highlight, when, how much, and so forth.

But, then again, it’s like any store. If your product is on Amazon, or a bricks-and-mortar store for that matter, you also don’t control how your product is presented there. So what you do is to try to control the channels outside your store to lead people to buy your stuff in the store.

So, the channels are:

  • Your own website. If you have a big website, that matters. Facebook, Pinterest, Zynga, Amazon et al. all have a great channel to promote their apps. They take people who go on their mobile website to their app.
  • You can leverage your existing paid or owned media, online or offline.
  • Earned media also matters: influencers, journalists and so on. If an app gets highlighted on several blogs at once, that app will shoot through the rankings. It’s random, but when it works, it works really well.
  • Twitter and Facebook are going to be huge app marketing channels, especially with the deep integration in iOS 6. Once you’re able to share an app with your network in a tap, this is going to be really powerful. But it’s still early.
  • Then there’s “SEO.” There’s Google SEO, trying to lead people to your website to download the app. A lot of people search Google for the “best X app”. And then there’s App Store SEO. Most people don’t search on the app store, but some do, and you need to anticipate their requests, by tweaking the name of your app, the description, the key words. This even though nobody knows how the search algorithms inside the stores really work. But people shouldn’t have to have to guess what your app does.

And finally there’s marketing: pay dollars to get people to buy your apps.

There’s two native marketing channels: there’s iAds for Apple and AdWords for Google. When you sign up as a developer they suggest that you use it.

Then there’s the non-native marketing channels.

There are two big families:

  • The incentive ad networks, which give you a reward, whether it’s cash, virtual goods, or some other freebie, in exchange for downloading an app.
  • And then there’s non-incentive ad networks, which are more like traditional online advertising.

The biggest players in the incentive game are Tapjoy and Flurry Mobile. Apple frowns on that. They’ve already dinged Tapjoy once.

The other problem with incentive ads is that you get a bunch of downloads, but of users that aren’t worth much, because they aren’t going to use your app.

The non-incentive people are all the mobile ad networks like Millennial Media, InMobi and so on.

And then there’s us. We do app promotion. We’re a new kind of marketing channel.

BII: Ok. So now that we know what’s out there–what works? What doesn’t?

OO: It depends on what you mean by “works.” What matters isn’t downloads, but active users. The industry is still very immature. You can buy a bunch of downloads, but that’s not going to do much good if you don’t have users who are actually engaged with your app.

It’s hard for smaller developers to see which channels works best, but the best gaming companies measure ruthlessly how efficient each acquisition channel is. And the answer is… that it’s hard to tell.

The industry is still very young, and so at this stage it’s very much an art and not a science. On the web, there’s a lot more experience and data with the marketing channels that exists, and so user acquisition has been turned into a science. And also users don’t end up inside a store. So there’s no science yet.

What the successful apps do is that they use all channels. And they tweak all the time, and they all use them differently. It’s very hard to say which is best.

These days, you can get a download for a free app for $1.50 to $2.50, more for paid or non-incentivized. The standard pricing is per click or per download. The prices are going up right now because you could use bots to rack up fake downloads, and Apple killed those, so money is flowing back to traditional channels.

BII: One common frustration we’ve heard speaking with app developers is that there are winner-take-all dynamics in the app store, with apps owning certain categories. What do you think about that?

OO: It really depends on the category.

But, one thing is for sure: there’s always room for new winners. Look at Draw Something: it was a huge success, the fastest growth ever in the app store. And yet Angry Birds Space comes along and grows even faster. And a few months from now it’ll be something else.

Take another example: to-do list apps. There are zillions of them. You’d think the market would be saturated. And yet this app Clear came along, with distinctive design, and it shot up to the top of the rankings even though it’s a paid app and all the other ones are free.

It’s like there’s infinite demand for new and interesting apps. People just have an appetite for that. Downloading an app is like turning on the TV to see what’s on.

So no, I wouldn’t say it’s winner-take-all at all.

The flip-side of that is that apps have a very short life cycle: a few months, maybe a year or two. Apple features new apps constantly. And it’s very hard to break through. There’s 650,000 apps out there. There will be a million soon. Out of those, two to five thousand will be very aggressive about marketing. All of that means it’s very hard to break through.

The store is still dominated by Apple’s rankings. The rankings are bad for the industry, frankly. It drives people to buy downloads just to be in the rankings instead of finding engaged users. Meanwhile 99.999% of the apps are hard to access and there’s a huge discovery problem. Apple should get rid of the rankings.

Source: Business Insider Intelligence

Apple A Mega Jobs Engine, 500,000 Jobs Created

Friday, March 2nd, 2012

In addition to creating blockbuster revolutionary products, Apple, has also been a mega jobs engine for the beleagured U.S. economy. Apple has created or supported more than 514,000 jobs for U.S. workers, according to the Analysis Group.

The are jobs are in four core areas, the app economy, jobs at Apple, Apple retail stores and U.S.-Based Customer Support. Apple said its iOS & app economy has created over 210,000 since 2007. It also has paid out $4 billion in royalties paid to date. Those numbers were independently verified by TechNet, which did its own study on the app economy jobs.

In addition to 47,000 jobs at Apple, the largest portion of that figure is an estimated 257,000 jobs supported by Apple at companies like Corning and FedEx. That includes the people who deliver and build Apple products and components, professional and technical services, and healthcare. The estimate comes from a standardized “employment multiplier” applied to Apple’s spending according to the Analysis Group.

The jobs Apple has been creating are high paying engineering, software, marketing & support jobs which pay more more than the U.S. median income. By contrast it competitors; Netflix, Amazon and Google create low wages jobs that require people to lick envelopes, pack boxes or click ads. Where the average work is making minimum wage except Google which makes a little more, US$22,000 for workers sitting at home clicking ads.

Top U.S. Metro Areas With Highest Percentage of App Economy Jobs
New York-Northern N.J.-Long Island 9.2%
San Francisco-Oakland-Fremont 8.5%
San Jose-Sunnyvale-Santa Clara 6.3%
Seattle-Tacoma-Bellevue 5.7%
Los Angeles-Long Beach-Santa Ana 5.1%
Washington-Arlington-Alexandria 4.8%
Chicago-Naperville-Joliet 3.5%
Boston-Cambridge-Quincy 3.5%
Atlanta-Sandy Springs-Marietta 3.3%
Dallas-Fort Worth-Arlington 2.6%
Top Ten States for App Economy Jobs (Percentage)
California 23.8%
New York 6.9%
Washington 6.4%
Texas 5.4%
New Jersey 4.2%
Illinois 4.0%
Massachusetts 3.9%
Georgia 3.7%
Virginia 3.5%
Florida 3.1%

The Future of In-App Purchases

Wednesday, February 29th, 2012

Mobile applications worldwide provide several different ways for developers to earn money from consumers as well as advertisers, and revenue from in-app purchases is expected to surpass revenue from pay-per-downloads in 2012.

The “Mobile Application Business Model” study released in February by market intelligence company ABI Research found that overall revenues from mobile applications, including in-app purchases, pay-per-downloads, in-app advertising and subscriptions will reach $46 billion by 2016, more than four times greater than the $8.5 billion earned in 2011.

ABI also reported that 2012 will be the year when revenues from in-app purchases will surpass those from pay-per-downloads, as in-app purchases become more widely available in applications other than mobile games.

In January, IHS Screen Digest, a media-focused research and consulting company, released the report “Mobile Media Intelligence Service,” predicting that in-app purchases will eventually bring in the majority of revenue from smartphone apps. IHS Screen Digest reported that in-app purchases worldwide earned $970 million in 2011, or 39% of total smartphone application revenues. This is expected to rise to $5.6 billion, or 64% of smartphone app revenues by 2015.

In-App Purchase Revenues Worldwide, 2011 & 2015 (millions and % of total smartphone app revenues)

The forecasts from IHS Screen Digest are smaller than those from ABI Research, as ABI also counted subscriptions and in-app ads in its forecasts; IHS Screen Digest reported just in-app purchases and pay-per-downloads.

In-app purchases are an interesting aspect of mobile revenue, as a majority of such purchases are made by high-level or power users of applications, particularly games. In January, mobile app analytics company Localytics found that 44% of mobile application users who made an in-app purchase did so after their 10th session in the app.

Timeframe in Which Mobile App Users Worldwide Make Their First In-App Purchase, 2011 (% of total)

To continue to capitalize on in-app purchases, mobile app developers—and the marketers they work with—must get non-power users interested in making purchases, and include in-app purchase options in applications besides games.

Here’s How Facebook Is Bypassing Google For Mobile Apps (GOOG, FB)

Monday, February 27th, 2012

Facebook new headquarters with Zuckerberg

Facebook is letting developers of mobile Facebook apps send charges to your phone bill, so users don’t need a credit card to buy the apps.

This won’t work on iPhones — Facebook and Apple have a deal where all Facebook apps must be sold through Apple’s App Store.

But it will definitely work on Android apps.

So, instead of forcing users to buy Facebook apps through the Android Marketplace (which gives Google a cut of every sale), or enter their credit card info for some new kind of Facebook-specific market (which very few people would probably do), users can just click and buy.

That goes for just about anything a developer wants to sell — another app, extra game levels, or physical goods.

In the U.S., participating carriers will include AT&T, T-Mobile, and Verizon.

We thought this would be coming when Facebook bought Bango, a company specializing in mobile carrier billing, last month. But today, the company confirmed it on a blog post.

In the same blog post, Facebook explains that it’s also making it easier for Android users to discover Facebook mobile apps without having to go through the Android Marketplace.

Specifically, Facebook is now letting developers use its Open Graph platform to push apps right on Facebook. For instance, if I use Foodspotting to recommend a particular dish at a restaurant, my friends on Facebook will see that recommendation. That might encourage them to download the app themselves.

Facebook already lets iOS and Web app developers use Open Graph, but today it announced it’s extending that to Android developers as well.

Source: SAI