Photo: Benjamin Boccas
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?
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.
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