App Store Marketing

Written by David Frampton @ 12:57 pm, February 3, 2009

Note: This blog post is now over 2 months old. The App Store is still rapidly evolving so though some of my comments and statistics still stand, others are already out of date.

App Store

I’ve had an iPhone app peak at #13 priced at $7.99, dropped the price to $0.99 four months later, and seen it rise to #2. I’ve also had an iPhone app that has not yet come close to paying me for the work I put into it.

But since the App Store launched in July 2008, I have been carefully watching the top 100, the free vs paid difference, the lite version influence, everything that seems to affect sales.

So I’d like to share my thoughts on pricing strategy in this crazy App Store sandbox.

No 99c

Many apps have dropped to $0.99 permanently, and my own DuckDuckDuck also dropped to $0.99.

I regret it.

One of the problems with hitting this price point is in the long term income. A month after the price drop, 6 months, 2 years… People who like an app, and then recommend it, are the best form of advertising. These wonderful, loyal customers perhaps unknowingly convince their friends to pay well for the recommendation. But not just yet. The tail of 1000 sales today lasts a hell of a long time. When their friends do happen to buy an iPhone, and then try out the App Store, and then buy an app or two, your app might be it. Hopefully it’s not $0.99.

But the biggest problem with setting an app price at the lowest possible value is that there is no room to move. Dropping the price may seem a good revenue increase initially, but sales will tail off. Then what can you do? Nothing. You’re selling two copies a day at 99c.

LESSON LEARNED:

If you’re thinking beyond the end of this month, don’t permanently drop the price of your app.

The general public will buy anything at low prices

Every developer has seen the apps that appealed to the $0.99 market. Maybe based on bodily functions, seemingly simple ideas, shiny objects…

And they do well… for a short while.

At $0.99 you’re aiming for everyone. EVERYONE who has an iPhone/iPod Touch. At the absolute lowest price that actually makes money, all of the people who wouldn’t normally buy your app are invited to give your app a one star review.

And a $0.99 app will get MANY one star reviews, even after increasing the price. Two months later reviews like this will still show up:
“…i vot it for 99cents and now its a wopping 5bucks woow…”

Of course it might get positive reviews too, but ranking seems to go down as you price too low. DuckDuckDuck went from ~4 stars to ~2 stars after the two week $0.99 -> free offer.

LESSON LEARNED:

If you price your app too low, you will get bad reviews.

Free for a while can help… sometimes

That sale on DuckDuckDuck was when it was doing really poorly at a couple of sales a day at $0.99. At that point I could do whatever I wanted as $2 a day is worth a piss in the wind. So I made it free over xmas and got a bit of press. DuckDuckDuck is now selling at $0.99 again, and has averaged about 20 sales a day since the increase. While free it was downloaded around 5000 times a day.

So my stats indicate that iPhone owners are about 250 times more likely to download a free app than a 99c app. So people are way way way more keen to download whatever the crap they can get for free than anything half decent that costs a dollar.

LESSON LEARNED:

If your iPhone app is selling poorly but might be appealing to some niche market, make it free for a while….. and most iPhone owners are freetards.

Role reversal

It’s completely unintuitive, but if you’re high in the charts you can get higher with a lower price. However, if you’re out of the charts you can earn more at a higher price.

If you’re anywhere near the top 100, a lower price will increase your rank. Once you get there, and in particular once you get into the top 25, if you have any kind of momentum, you have a chance at the top 10. The #1 app in the paid top 100 is usually getting more than 10,000 sales a day. And at a good time, or with a good app, you might get 50,000 sales for a day or two. At #15 you’re looking at about 1,500 sales a day, #50 roughly 500 sales, #100 roughly 300 sales. (all early 2009… Hi future people!, bad search!)

There is an interesting curve here for statisticians, but right now if you get to the top 10 it doesn’t matter what your app is priced at, you are making a shit load of money.

On the flip-side, if your app isn’t high on any charts, then you have a market that is almost normal. You can experiment to see where your greatest revenue lies, you can put your app on sale, or make it free for a while… you don’t really have anything to lose. Try it.

If you manage to get featured by Apple, it’s even more interesting. You can just ride it out at your current price, and get a nice bump in revenue, or you can drop your price immediately and try to ride the charts for a week…. or more if you have something shiny.

In general though, if you are close to the top 100, over a couple of weeks, low price will give better revenue, until you get high, then high price will give better revenue… until you get low… But change your price too often and you’ll die…

… and then there are the apps that sit happily in the top 25 at 99c for months… You cannot get there. 1 in a million now, they’re all old flash games and shit. Glider could do it, where is Glider?

LESSON LEARNED:

If the rank drops, increase price, if it sores, decrease price. Yeah, it’s backwards.

The Tail

Chopper went from obscurity to #2 top paid in about 2 weeks. The cause of this was a price drop: $4.99->$0.99. At $0.99 It quickly rose for a couple of weeks, then quickly fell for a couple of weeks. It also went from 4 and a half stars to 3 and a half stars. When it got below #25 I put the price back to $4.99, and have mostly been getting higher revenue than #25 at 99c.

The App Store tail is getting fatter. 6 months ago if you weren’t featured, you made nothing. 4 months ago, if you weren’t in the top 100 you made nothing. Now… it’s getting better… I think it will get better still… #500 at >$2.99 is probably making a living. The App Store is still attractive, it’s just getting harder to get noticed. At Roughly # 300, at $4.99, Chopper is making $500US+ a day right now. Thats OK in my book.

LESSON LEARNED:

It’s OK. make some apps… you probably have a better chance on the iPhone than anywhere else.









32 Comments

  1. Matthew Rogers

    That was *extremely* helpful, thanks for putting that all down and providing some numbers! We’re getting ready to release our first app (which we’ve put a lot of effort into) and are struggling a bit with how to price it, so I really appreciate the insight.

    Comment by Matthew Rogers — February 3, 2009 @ 3:16 pm


  2. Tivums

    Great post! It’s always nice to hear some details about the App Store ecosystem.

    Comment by Tivums — February 3, 2009 @ 4:31 pm


  3. Jason

    Nice post, I have been debating what I want to price my next app at, still not entirely sure but after placing TargetTap at 99 cents I’m going to try a bit higher. One thing I would like to know is how does the star rating affect sales/position in the app store? I wish Apple gave us more statistics…(Of course then I would have no time to write apps :)

    Comment by Jason — February 3, 2009 @ 10:12 pm


  4. Paul Golding

    Interesting article David.

    It is still a risk-reward equation though. If it only takes 2 weeks, say to write a ‘ring-tone app’ and sell it at 99c, is there a business model for doing this – perhaps with many apps. I’d like to hear from experienced iPhone developers how quickly these sorts of apps can be developed.

    Do we have any insights yet about how important it is to refresh an app with features in order to continue making money from it? What is the strategy/thinking here? And what about the Lite/Full model? Does this gain traction in app store?

    In terms of actual marketing of apps, then is the app store enough? Do we still need other channels to get iPhone users’ attention? if so, which channels?

    What about the iFart creator’s recent move to include a prize offer within their app to come up with their next Youtube ad – is this a good viral marketing idea off-channel? Any other evidence of this?

    The app store is a great open marketplace, yes, but how much further does it need to go? How do add other ‘views’ of quality and relevance into the market besides the current limited – and flawed – reviews, stars and ranking system?

    Please keep sharing your insights – thanks.

    Comment by Paul Golding — February 3, 2009 @ 10:32 pm


  5. Cyril

    I’m writing the same kind of post, right now, only with more graphs and figures. And less success (my best rank was probably #2500). That’s fun.

    And I drew the same lessons. Now I’m back at higher price, and looking for other opportunities to make my apps live longer. I kind of wish I had read your post 2 weeks ago. Maybe I had to see for myself…

    Comment by Cyril — February 3, 2009 @ 10:36 pm


  6. Interesting Insight Into App Pricing From Chopper Developer - News - 148Apps - iPhone App and Game Reviews and News

    [...] the developer behind Chopper (iTunes Link) and Duck Duck Duck (iTunes Link) has posted a great article on his blog about what sales numbers he has seen as he has changed the price of his apps. [...]

    Pingback by Interesting Insight Into App Pricing From Chopper Developer - News - 148Apps - iPhone App and Game Reviews and News — February 3, 2009 @ 10:43 pm


  7. Jonau65

    I’ve got a fair bit of data up for WOBBLE http://chillifresh.com/ We priced it at $0.99, because that is what it is worth to people (I think).

    Our average review is 4.6 Stars, worldwide, so I guess we priced it right, with *nobody* complaining about the price. We’ve had about 5 x 1 Star reviews, and they have mostly been people who don’t add a rating that makes sense compared to their word review…???

    Comment by Jonau65 — February 3, 2009 @ 11:45 pm


  8. Titus

    Thanks for the information, it is very helpful and always nice to see the mystery of the App Store become less of a mystery :) Good luck with all your apps, I hope they do awesome!

    Comment by Titus — February 4, 2009 @ 1:53 am


  9. Some things to think about around mobile development « Mobile Dev Camp Helsinki

    [...] of the posts had already caught my eye – App Store Marketing, as it is very relevant to anyone intenting to develop (and attempt to sell) a mobile application. [...]

    Pingback by Some things to think about around mobile development « Mobile Dev Camp Helsinki — February 4, 2009 @ 6:43 am


  10. Cyril

    Okay here is the URL to my own post & figures :

    http://cyrilgodefroy.com/blog/index.php/2009/02/of-appstore-and-bad-ideas/

    Comment by Cyril — February 4, 2009 @ 2:25 pm


  11. Chip

    David did you do any paid promotions for the iPhone version? I bought it after playing the desktop version (love it) so was familiar with it and your work. We have our first app coming out soon and are planning our paid promotions in preparation for the launch.

    Great article, thanks for the insight.

    Comment by Chip — February 4, 2009 @ 3:10 pm


  12. Liz

    Just wanted to say thanks for posting this, really useful

    Comment by Liz — February 4, 2009 @ 4:11 pm


  13. links for 2009-02-04 | /dev/random

    [...] App Store Marketing « Majic Jungle Blog Good advice for selling & pricing iPhone apps. (tags: iphone appstore pricing) [...]

    Pingback by links for 2009-02-04 | /dev/random — February 4, 2009 @ 6:00 pm


  14. Todd Bernhard

    Great insight. We’ve had similar observations with our app, 100sounds, but we always priced it at $0.99. As a consumer, I don’t like when somebody else gets the same item cheaper, and this way, every purchaser pays the same price, and aside from being free, it couldn’t be cheaper. And if it was free, we couldn’t support it the way we have. One of our most frequent compliments in reviews is our response time, and our free ringtone giveaway.

    We reached #33 overall, and #7 entertainment. That was during Christmas, which was huge. Since then, we’ve advertised, and we have our $1,000 iTunes giveaway (send a video, get $10, for the first 100 videos). As new, buzzworthy apps come out, the inevitable slide has begun, and we’re now #85 but still #14 or so in Entertainment, so it’s nice to know (or hope) that even if we get bumped out of the Top 100, there’s still sales to be made.

    Comment by Todd Bernhard — February 5, 2009 @ 12:21 am


  15. KRAPPS

    Thank you for the excellent insights … it’s really fascinating to read this analysis about the App Store since it’s such a new and unique market/selling place. Good luck to you in the future!

    Comment by KRAPPS — February 5, 2009 @ 7:01 am


  16. Josh

    What happens if you set your app for free for a promotioanl launch, it gets really high ranking then you put your price 2.99 or what ever on it?

    Do you loose your ranking?
    I’m guessing you do because there is a paid top 100 and a free top 100
    So I guess you start again as soon as you put a price on it?
    or not?

    Comment by Josh — February 5, 2009 @ 8:23 pm


  17. Fourth Man

    Hey, great info. Thanks for making the game. really reminded me of choplifter “back in the days”. I’m one of the cheapos that bought it at .99. Main reason for me was that i was willing to try it from the good reviews and screen shots for the buck but not for 5. Tried apache lander and couldn’t get rid of it fast enough. I have bought a few other apps after trying the lite versions and being able to check out the graphics,gameplay,usefullness etc. so just a little feedback for you thanks again lots of fun.
    P.S. The guy that made ishoot had limited results from Oct to Dec until he made a lite version then both went to #1 in Jan in ten days. full story http://www.iphonesavior.com/2009/01/iphone-developer-quits-day-job-after-ishoot-hits-number-one.html

    Comment by Fourth Man — February 6, 2009 @ 6:22 am


  18. Developer On Effect Of Low Prices On App Popularity, Sustainability | MacWorldGame

    [...] You can check it out on his blog. [...]

    Pingback by Developer On Effect Of Low Prices On App Popularity, Sustainability | MacWorldGame — February 6, 2009 @ 9:48 am


  19. Chris

    For people who are interested, I also published the sales figures of my app (GeoLogTag – Photography). You can find them here.

    Comment by Chris — February 6, 2009 @ 10:27 am


  20. Pixelthis

    Thanks for the great info.
    As a NZ game development studio recently branching out to iPhone, this is good news. Although we are still waiting (2 months now) for our contracts to be approved! http://www.pixelthismobile.com

    Comment by Pixelthis — February 8, 2009 @ 10:58 pm


  21. Veiled Games » Blog Archive » Sales Post 13: The Dust Settles

    [...] let’s get down to the real Nitty Gritty now, shall we? Do yourself a favor first, and read this post by my buddy Dave, developer of App Store legend Chopper, and good friend of Veiled Games. If you [...]

    Pingback by Veiled Games » Blog Archive » Sales Post 13: The Dust Settles — February 9, 2009 @ 1:47 pm


  22. Johnny Knoxville

    As one of the many “freetards” as you put it, I’ve been burned by a lot of crap @ $2.99+. The reviews are mostly poorly written and don’t provide a good enough idea of how the app really works and if I’ll get good use out of it. Additionally, many people are riding the “iPhone Hype Bandwagon” and putting out whatever crap comes out of their head. Much like Hollywood does. They wonder why ticket revenue is down. STOP PRODUCING CRAP!! Lite versions are great for this because if the Lite version is really, really good, I’ll buy the full version and so will others.

    One other thing – this world has been spoiled by Google and Microsoft and we now expect many things to be free.

    Comment by Johnny Knoxville — February 9, 2009 @ 5:57 pm


  23. Ellen

    I’m trying a poll, to see how people use the App Store, and what they think about pricing. The more responses it gets, the more useful the info (which I will publish, assuming we get a decent amount of response) will be.

    It’s at http://survey.constantcontact.com/survey/a07e2gjphsyfr0sn6tg/start

    Thanks,

    Comment by Ellen — February 12, 2009 @ 1:40 pm


  24. Movile

    [...] coming from another source: David Frampton over at Majic Jungle Software.  And they have written this beautiful post about the pricing trends in the App Store and how they don’t quite mesh with anything we see [...]

    Pingback by Movile — February 13, 2009 @ 7:41 pm


  25. App Store insights at Under The Bridge

    [...] App Store Marketing [...]

    Pingback by App Store insights at Under The Bridge — February 16, 2009 @ 12:52 am


  26. Dave M.

    As one of the “Teenagers and retards” or customers of apps in the AppStore, I thought I would shed some light on my “purchasing habits”. I rarely purchase an app at full price. There are over 20,000 apps in the AppStore and that number is growing constantly. So if I find something I might want to purchase, odds are, there is a different app that does something pretty similar for less.

    Also, I found an app that I did purchase at full price called AppSniper. I use this app to keep track of apps I am interested in. It will flag me when an app I am interested in has a price change. I can tell it to tell me when it goes to or below a certain price.

    I don’t always wait for that to happen, mind you. Rolando and Edge were purchased at full price. However, Downhill Bowling was purchased on sale.

    I have quite a few apps in AppSniper waiting for a price drop. There are a couple I am really interested in and if they don’t go on sale soon, I’ll probably purchase them at full price.

    You see, I currently have 228 apps. The iPhone can only show 148 apps in its current incarnation. I would love it if the firmware was updated to support more pages or a different way of displaying what apps are installed. Until then, I have to “uncheck” many of the apps I have to make room for the ones I am currently using. With this in mind, I don’t purchase apps willy-nilly.

    I have aspirations of creating my own iPhone/iPod Touch app at some point in time. I have a game in mind that is currently not in the AppStore, hard as that is to believe. I am studying books and tutorials now. It’s going to take me a while since I am new to Objective-C and Mac programming in general.

    Depending on how the app looks when its finished, I’ll probably price it at $4.99. I’ll offer a “Free” demo version for folks to see how it works. I wish Apple had a way to do this without the developer having to make two or multiple versions of their apps, but until Apple does something to change this, thats the way it is.

    Anyway, I just though I would throw my dollar’s worth into the discussion. :)

    Comment by Dave M. — February 16, 2009 @ 9:29 pm


  27. iPhone 3G » Blog Archive » Navigating The App Store Pricing Wars

    [...] "App Store Marketing" ] [...]

    Pingback by iPhone 3G » Blog Archive » Navigating The App Store Pricing Wars — February 17, 2009 @ 4:39 pm


  28. The Case Against Free | untoldentertainment.com

    [...] Frampton at Majic Jungle Software makes a strong case against devaluing your software. In his experience, lowering the cost of entry brings out the worst [...]

    Pingback by The Case Against Free | untoldentertainment.com — February 18, 2009 @ 8:07 pm


  29. iphone developer

    That’s a lot for the numbers. Just interesting, how much does getting into “Staff Favorites” increase sales

    Comment by iphone developer — February 20, 2009 @ 2:20 pm


  30. Nikita Logachev » Blog Archive » App Store Price Strategies (MajicJungle.com)

    [...] Frampton (MajicJungle.com) recently posted a blog entry talking about marketing and pricing strategies for the App Store. It’s a great read for [...]

    Pingback by Nikita Logachev » Blog Archive » App Store Price Strategies (MajicJungle.com) — February 20, 2009 @ 6:51 pm


  31. Of AppStore and Bad Ideas » Le Lab

    [...] course, I didn’t reach any of my goals. As I read there, there are lessons to be learned, just don’t do it the hard way. Hard for your bottom [...]

    Pingback by Of AppStore and Bad Ideas » Le Lab — February 22, 2009 @ 10:13 pm


  32. Michael Yuan » Blog Archive » Mobile Monday Austin Talk on iPhone app stores

    [...] * But all those “ringtone app” complaints ignore the long tail in the app store [...]

    Pingback by Michael Yuan » Blog Archive » Mobile Monday Austin Talk on iPhone app stores — February 24, 2009 @ 8:34 am


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