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Monetising Apps: Lessons Learned In The iOS Wilderness

Free App Hero was a critically-lauded but unsuccessful aggregator app for iOS that provided reviews and links to the best free games in the App Store. Not unlike our own App Deals Of The Day, it strived to sift the gold from the muck so that its users wouldn’t have to. In the following article, the app’s creator Stuart Campbell explains the various business models he deployed in a vain attempt to monestise the service. If you’re looking to launch an app of your own, his observations make for some essential reading.

App shopping picture from Shutterstock

Herosoft – the developer of which I’m a director – launched Free-App Hero (FAH) back in November 2010. Since then the app has featured reviews of over 1,000 permanently or temporarily free games, writing more than a quarter of a million words about them (that’s about the length of three typical novels), in an attempt to help people through the vast swamp of rubbish iOS games and direct them to stuff that was not only free but also good.

The app was warmly received everywhere, with glowing reviews and coverage in every branch of the media, from broadsheet newspapers like The Guardian to all-format gaming sites like Eurogamer and dedicated Apple blogs like Cult Of Mac. User reviews were extremely good too, with an average of 4.5 out of 5 stars.

But sadly, it wasn’t enough.

Fewer than 0.2% of the app’s users ever bothered to leave an App Store rating – let alone a review – and those are the things that really give an app a chance of success. As a result, sales of FAH were nowhere near enough to justify the many hours of work that it took to regularly update. In short; the bills needed paying so we abandoned ongoing support for the app.

However, the lessons we learned during its life (such as they are) might prove marginally useful to other budding developers, so we might as well share them.

The evidence is overwhelmingly in favour of the assertion that if you have an app with high visibility, selling it cheaper will make you more money. (For example, when Street Fighter IV for iOS slashed its price by 90 per cent overnight, its position in the overall Top-Grossing chart instantly rocketed from 116 to 2). However, at low visibility and low sales, it turns out that the opposite can be true.

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What we found was that almost any time we changed the price of the app (and we changed it frequently), sales went up. But the odd thing is that this was true whether it was a price cut or an increase. The mere act of altering the price, in either direction, raised the app’s visibility (by making it appear on trackers) and got more people buying it.

Now, the numbers involved were mostly so small that it’s hard to draw any meaningful broader conclusion from them, but the most obvious one would seem to be that at the low levels of even relatively-premium App Store titles, consumers don’t actually care much about prices.

That theory, however, was shot to bits when we made the app free. The first of FAH’s two free promos came a couple of months after release, when we made it free for a single weekend. Compared to the previous two days (when the price had been £1.19), downloads for those two days rocketed by a staggering 180,000 per cent. When we’d cut to 59p just before Christmas there had barely been any spike at all, but crossing the “penny gap” sent figures into the stratosphere.

An interesting side aspect to those stats was the discrepancy between territories. In the US, the free promo was by a huge margin the app’s most successful period. It was the only time it broke into the Utilities top 100 (at no.39), and the only time it appeared in the Overall top 1000 (at 505).

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In the UK, however, while the free promotion gave the app a sizeable boost, it was nowhere near its most successful time. (See previous graph.) That freebie weekend saw it climb to only 103 in the UK’s Utilities listing, and nowhere in the Overall chart. It did better than that on numerous occasions, peaking at 25 in the Utilities chart and 349 in the Overall chart a month later, with the release of a fairly minor update and with the price back at £1.19.

The app was if anything more US-focused than UK, with prices for non-free apps listed in dollars rather than Sterling, so the only rational thing to be drawn from this evidence is that US consumers are a lot cheaper than UK ones.

Following the boosts from the promo, the obvious step was to make a dedicated free version, supported by ads. The first incarnation of Free-App Hero CE (jokingly called Cheapskate Edition) had permanent ads and less content than the paid version, but all the same daily updates. After a bizarre opening week in which it charted in the “Trivia” and “Action” listings, though, it had nothing like the success of the freebie full version. Indeed, for much of its life it ranked lower in the Utilities chart than the paid version.

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CE was making us next to nothing in ad revenue, so after a while we pulled it and had a rethink, and I came up with what seemed like a brilliant and pioneering idea. As well as now featuring 100 per cent of the content from the paid version, CE 2.0 (now with the less pejorative soubriquet “Core Edition”) would adopt a new ad model that I’ve never seen anyone employ before or since – there would still be ads, but clicking on just one would disable them for a week.

This seemed like a win all round. You get paid vastly more by ad companies for people actually clicking on ads than you do for simply serving them to people who ignore them, so it’d be good for us. Users would have literally two seconds of tiny inconvenience a week in return for a full-featured but free version of the app, so it was good for them. And the ad companies would get clickthroughs, making them happy too. Best of all, it’d provide Herosoft with a continuous revenue stream – rather than the potentially problematic scenario of being paid once and then having to maintain the app forever – which again would benefit all concerned.

The result was bewildering – the new CE continued to shift fewer copies (or just barely more) than the paid version. When we had our second free promo on the full version in late August to celebrate passing 1000 games reviewed, downloads of the full version rocketed by tens of thousands of percent again – showing that there was clearly still plenty of unfulfilled demand for the app – yet hardly anyone was downloading what was to all intents and purposes the exact same thing when it was free all the time.

(This may have been partly attributable to a lack of user knowledge of the feature. We’d been reasonably circumspect about the new ad model in the App Store blurb, because of concerns that Apple would object to it – there’s no rational reason they’d do so, but they’re Apple and several developers had advised us to exercise caution after a crackdown on incentivised downloads earlier in the year – though we’d been sure to mention it prominently when publicising the release on message boards and suchlike. FAH CE wasn’t incentivising any third-party downloads and posed no such threat to chart rankings, but you really can’t be too careful with dealing with the company’s liquid evil.)

The other counter-intuitive discovery we’d make was in respect of the power of media coverage. As noted way back in the second paragraph, FAH got almost uniformly glowing press, and in places with high readership levels. We held our breath in anticipation when the popular Apple site Cult Of Mac covered the app not once but twice in the space of four days, but sales in the weekend after they dubbed it their “must-have app of the week” struggled barely into three figures.

And that was the high point. Positive coverage in Eurogamer, Pocket Gamer and The Guardian made no discernible impression on sales at all. (The second-biggest sales spike from press coverage came after a passing mention in Rock, Paper, Shotgun, despite its being a PC-only site, but was still tiny.)

Despite conventional wisdom, then, even highly-favourable reviews did the app no good at all. The only thing that can be said with confidence to give an app the best possible chance of success is being featured by Apple, and Free-App Hero was always up against it in that regard.

The reasons for that are obvious and rational. Apple don’t want people playing free games, because a 30% cut of nothing is nothing.

Tracker apps like AppShopper and FreeAppKing actually explicitly break the App Store’s terms and conditions (specifically section 12.1, “Applications that scrape any information from Apple sites (for example from apple.com, iTunes Store, App Store, iTunes Connect, Apple Developer Programs, etc) or create rankings using content from Apple sites and services will be rejected”).

FAH doesn’t do that, but the trackers are (presumably) tolerated despite being in breach of the T&Cs because they direct people to paid apps as well as free ones, thereby still making Apple money. FAH, delivering people high-quality free apps with the potential to eat substantially into users’ available gaming time without generating any money, was never likely to win friends in high places.

So we’re looking forwards. Herosoft will hopefully be releasing a new app in the future, which will take these lessons on board and try to build on the foundations of Free-App Hero’s tens of thousands of users and modest profits.

Stuart Campbell is a veteran UK journalist specialising in video games, music, Scottish politics and the peculiarities of iOS. You can read more of Stuart’s work at his official blog. The FAH app can still be purchased as a reviews archive with links to around 300 permanent freebies at the App Store.