Confusion Around App Store Rankings with iOS6 App Store App Update
I have previously written tips about how to rank high in the App Store. I’m not sure how relevant those chart ranking tips are now given the App Store app update in the recently released iOS6.
According to FieceMobileContent, “the changes are quite profound and make us believe other factors beyond velocity of downloads are now heavily influencing the rankings algorithm ranging from social activity around the app, search activity and potentially the speed of upgrading of apps.”
I’ll definitely be writing another post on the iOS chart ranking topic as the dust settles.
W3i Triples Growth For Its App Monetization Business
Check out the story updating the progress we are making at W3i including a couple of nice quotes from me.
North Hennepin Community College Delivers On Mobile Education
Last year, North Hennepin Community College computer science faculty asked me what my employment needs were as a Minnesota technology business owner and employer of computer science graduates.
I told them that we need to see more graduates trained in emerging technology fields such as mobile application development, explaining that companies like ours have been experiencing huge shortages in this type of talent despite massive industry growth – causing us to outsource high-tech jobs to a small number of qualified job seekers from other states and countries.
They asked. I answered. They delivered.
How to Create a Profitable User Acquisition Strategy for Your App
Check out my video interview with Jolie O’Dell at the MobileBeat 2012 conference.
Tips for Designing for App Monetization
[Originally posted on VentureBeat July 16th 2012]
At the recent MobileBeat/GamesBeat conference in San Francisco, I was interviewed on stage by Matt Marshall, VentureBeat’s Founder & Editor-In-Chief on the topic of designing apps for monetization.
The problem most app developers have is that they overly focus their initial design efforts on engagement and retention rather than monetization. Most developers believe that once they launch a highly engaging mobile app, they’ll get around to optimizing for monetization. The problem is that most apps achieve their peak traffic levels within the first three to six months of launch. By the time they get around to optimizing monetization, they already blew past their peak traffic levels and are declining quickly.
The solution is to focus on designing for monetization upfront. Here are three specific examples of high impact tactics you can implement during design:
- Integrated Interfaces for In-App Purchases/Offers - At W3i, one area in which we go above and beyond for our app partners to help them grow their business, is in optimizing their interfaces for in-app purchases and offers. Specifically, we see custom interfaces more than double generic interfaces that other monetization platforms typically utilize.
- Explain What an In-App Purchase Upgrade Does – One mistake we see commonly made by developers is that they do not sufficiently explain how an in-app purchase upgrade will create value for the user’s experience. Better to excessively explain to a user what an in-app purchase upgrade does for them rather than to leave them in the dark.
- Up Sell At the Right Time – Coordinate the offer with natural opportunities within the game. For example, when the user is playing your battle game and loses a battle, display a better weapon at the level recap screen that could help them win the battle.
How do you know if your game is monetizing well? Let’s look at three different perspectives:
- Percentage of Paying Users Each Day - In partnership with W3i, Kontagent recently analyzed the behavior of 2 million unique users across 19 different apps from March to June and found that the range of paying users on any given day was from approximately 0.02% (two one hundredths of one percent) to 0.1% (one tenth of one percent).
- ARPDAU Benchmarks - Across W3i’s network of 13.7 million daily active users, Average Revenue Per Daily Active User (ARPDAU) typically falls within the $0.05 to $0.25 range for the more successful casual/mass market iOS games, with about 40% of their revenue (on average) coming from offer-based monetization provided by W3i. The balance of monetization coming from cash transactions.
- ARPDAU for the Highest Grossing Apps – Neil Young, CEO/founder of ngmoco, which is now owned by DeNA, recently reported that in their Rage of Bahamut game, which is consistently among the highest grossing titles in the U.S., they are generating as much as $0.60 to $1.50 ARPDAU. Before you race out and design your own strategy/RPG game, you may want to consider the massive amount of advertising being invested by DeNA/ngmoco, Gree, and others. As Gabe Leydon, CEO/founder of Machine Zone, stated during a recent panel I spoke on, we are just seeing the beginning of pressures on user acquisition in the strategy/RPG world as we have yet to see the impact of the largest game companies, like Tencent, launch in North America. Expect the costs to acquire users to continue to go up over the next 5-10 years as the land grab continues. Small- to medium-sized game developers should think about becoming ad suppliers and creating casual/mass market apps which showcase strategy/RPG apps.
Be proactive when in the planning stage to determine how you are going to monetize your game. Basically the more integrated the monetization, the higher the conversion and the less invasive the ads so as not to deter retention. Successful apps figure out this delicate balance.
iPhone game marketing costs keep rising to “insane” levels
Via GameIndustry International
“Smaller iOS developers fear being pushed out of a crowded market
At a panel at VentureBeat‘s GamesBeat 2012 moderated by GamesIndustry International’s Steve Peterson, iOS developers shared their woes in marketing their games in a crowded app store. User acquisition costs are rising to the point that many free-to-play titles will spend more on marketing than they’ll make in lifetime revenue. The panel was attended by SkyVu Entertainment founder Ben Vu, Machine Zone chief executive officer Gabe Leydon, mobile consultant A.J. Yeakel, and W3i cofounder Rob Weber.”
What’s New in Mobile Ad Tracking for App Developers
[Originally posted on ClickZ June 28th 2012]
Last year, Apple said it may restrict iPhone trackers used in iOS apps for ad targeting and tracking, namely unique device identifiers (UDIDs). In the August 2011 article, “Apple to Restrict iPhone Trackers Used in Ad Targeting” ClickZ examines this dilemma. Then TechCrunch subsequently reported in March 2012 that the App Store was rejecting apps by the App Store because they share UDIDs.
Eliminating access to UDID information has enormous impact on the industry as these are the common identifiers that app developers and networks use to tie user information together. For example, by collecting UDID on click and again on app installation, two disparate networks can trace the complete activity stream of a user. There were claims that the TechCrunch article is a false alarm but it caused developers and networks to seriously consider how they’ll address the eventual elimination of UDID information sharing.
Industry Response to Date
Key players in the industry are choosing to support a broader set of tracking identifiers including OpenUDID, a freely redistributable open source initiative, and encrypted MAC Addresses (SHA1 or MD5 hashed), a unique device identifier defined for hardware. This approach provides maximum compatibility with leading buyers and sellers of mobile advertising supporting strong mobile ad tracking across a broader reach.
Apple’s Response
Recently The Wall Street Journal reported that Apple plans to release a new way for mobile app developers to track who uses their software. The WSJ said the new tool apparently aims to better protect user privacy than existing approaches. At this point, Apple has not made any public announcements. VentureBeat’s Devindra Hardawar is predicting what the new tracking tool might look like.
- Opt-in tracking + toggle switch: Giving users the option to toggle tracking off and on.
- Stricter developer rules: Once rules are developed, enforcing the rules by rejecting apps and developers.
- Per-app tracking: The ability to tweak tracking by individual app.
What About Android Apps?
Identifying users is not quite as complicated with Android apps. There are two types of user IDs:
- Android ID, a Google-developed Android device identifier defined by the OS. Google publishes Android, but its actual support varies by device manufacturer.
- Android Device ID, an Android device identifier used on phone devices.
Most ad buyers and sellers choose to collect both identifiers. That’s because Android ID can be used on Wi-Fi-only devices due to incorrect manufacturer implementation so it is not accurate for all devices whereas Android Device ID can be used accurately for all phone devices but is not available on Wi-Fi-only devices.
The saga continues as the industry searches for the acceptable identifier. Stay tuned for an Apple announcement in the near future.
Dear Minnesota Tech Entrepreneur
[Originally posted on Tech.MN June 5th 2012]
I have never met Joe Serrano, but I must say that as a Minnesota angel investor and a Minnesota tech entrepreneur, I found his recent guest post titled “Dear Minnesota Angel Investor” to be grossly misguided.
In it, he begins by questioning whether Instagram could have been built in Minnesota, and comes to the conclusion that it couldn’t have because Minnesota angels are only looking for singles and doubles. He’s right that Instagram could not have been built in Minnesota, but I don’t see it being built anywhere else in the world outside Silicon Valley either.
Looking closer at Instagram’s funding, we see that their $500k seed round came from Andreessen Horowitz and Baseline Ventures on March of 2010. 500K could have been raised in Minnesota with some hustle (more on this later), however, even with this first small seed round we are already getting a big clue of ‘why not Minnesota’.
By adding Marc Andreessen, a board member at Facebook, the probable exit scenario starts becoming very clear, very early! They were predestined to raise a large round (as they did 11 months later with their Series A) and go for a large exit, as they did. This is the kind of insider baseball that regularly happens in Silicon Valley.
The reason for this is the later round capital needed for these hyper growth social businesses is not available for pre-revenue social businesses in Minnesota — or anywhere else outside of Silicon Valley. The folks in Boston which has a massive amount of smart tech talent missed the entire social movement too. It isn’t just a Minnesota thing, but pretty much the entire rest of the world, minus Silicon Valley.
Getting to the right answers requires asking the right questions:
Why do we not have a more vibrant community of angel investors in Minnesota?
(1): Lack of (enough) grand slams & home runs: Silicon Valley has created a virtuous cycle which folks in Minnesota don’t talk about. A friend of mine whom graduated in 2009 with a Bachelors degree in Mathematics from Stanford and immediately created a $1 million plus a year two person business creating casual iPhone games summed it up well. People outside of Silicon Valley think all the college grads coming out of Stanford immediately create their own start-up like he did, he said. But it’s just not true.
Nearly all of the college grads get recruited into Facebook, Google, Apple, etc. and plan on putting in three or more years vesting their stock options, and developing deep expertise in high growth markets before launching their first business. When these young stars go to cash in their million dollar payday, they now have the cash to invest in their business, the relevant expertise to inspire confidence from angels, and possibly enough money left over to throw some money into other similar businesses.
(2) Low Level of Market Expertise. What separates Doug Berg, founder of Jobs2Web (which later sold to SuccessFactors for one of the biggest exits in the past decade in Minnesota tech) and most of other founders in Minnesota? Prior to Jobs2Web, Doug cut his teeth with Techies.com. Although it was ultimately unsuccessful, he was able to develop a deep understanding of the jobs and recruiting market. This experience prepared him for Jobs2Web, although you don’t need to have a failure to develop market expertise. Go spend three years at one of Minnesota’s leading tech growth companies.
Since we don’t have Facebook, Zynga, Google, or Apple, these Minnesota growth companies are the best potential catalysts we have to become the big winners which spark the local angel market in a smaller but similar way as Silicon Valley’s blockbuster home runs.
Too many Minnesota startups are seeking (and expecting) funding without any proven ability to execute in their domain. This is related to point number 2. If you have been a meaningful contributor within a growth company, you’ll have no trouble getting funding without a super detailed business plan and possibly even without a beta version of your upstarts hot new technology. If you don’t have this proven track record, then you need to show your market expertise both in terms of financial assumptions but also in your ability to show a beta version of your hot new technology.
For those creating destinies, not excuses…
Start with your own capital. Don’t come asking an angel for their money until you’ve put in a substantial amount of your own money first. Yes, sweet equity counts, but you need to quantify this as much as possible by showing and explaining what has already been accomplished.
Establish a board of advisors. Take 2.5% of your upstart’s equity, and dole it out in the form of stock options at 0.5% vesting over 3 years to the 5 most successful, smartest set of board advisors in Minnesota and in Silicon Valley whom have perspective and relationships to help you grow your business. Set clear expectations of the time commitment (an hour a quarter perhaps, phone calls okay for out-of-state advisors, etc). Do this before raising money. This will make raising money much easier given the added perspective, and will greatly widen your network of potential investors as your advisors will be able to help.
Focus on key measures. Angels will want to see proof that you can execute, and that you have some idea of how you will create value.
Pre-Launch:basic, bottom-up key metric model stating your assumptions, and how they will create value. If you will have a revenue model right out of the gate, share it and be prepared to explain your key assumptions. If you are pursuing another way to create value like building out a massive user base like Instagram, share your key metric assumptions too (viral coefficient, engagement metrics, etc).
Post-Launch: show the growth in your key measures, be honest about which assumptions were wrong, which were right, and how the business is evolving. If you haven’t been able to demonstrate a growth model (even if the base is very small) don’t go asking for serious money yet. You are too early to be funded in Minnesota, unless you have very high market expertise.
Let’s stop complaining, and start taking action. Ask yourself: “What can I do to make the Minnesota tech community stronger?”
What Does Apple’s New iPad Mean for Marketing?
[Originally posted on ClickZ March 7th 2012]
“The biggest impact for marketers will be LTE support. This will dramatically increase internet speeds and result in the ability to create much more engaging app experiences,”
Is Apple going to be overhauling the way apps are discovered?
[Originally posted on GameZebo February 29th 2012]
As you may have heard by now, last week, Apple acquired Chomp – an app discovery engine. This strategic move will play a crucial role in Apple’s effort to renovate the App Store, particularly in search. TechCrunch reported the story first, stating, “investors should be very pleased with the outcome.” Since then, numerous other sources have estimated the deal to be in the ballpark of $50 million. After a record year in sales, Apple is sitting on about $100 billion in cash however they don’t generally put much emphasis on making acquisitions – this one is suspected to be a symbolic jab at Android. We’ll revisit that later. Other improvements we expect include; increased speed, interactivity, and a simpler design.
What does this mean for iOS users?
I think it’s fair to say that most of us with iOS devices have browsed the App Store at one point or another and failed to locate the app we were looking. As a result, we either left the store empty handed – so to speak, some resorted to Google for further research, and others probably skipped over to the Top 25 and found a different app. Regardless of the outcome a clear problem exists.
In all fairness, Apple isn’t a search company. They are certainly familiar with search but it’s not their forte and with the number of available apps exploding from 15,000 in January 2009, to over 575,000 today, they have been quite busy riding the wave but the time has come for an upgrade in the discovery process. This problem is not breaking news, in fact, in January 2009 when the App Store was merely a toddler, 300,000 users downloaded Chomp – indicating they wanted better results. Still today, if you search “arcade games” in the App Store your search will retrieve a list of games that either include “arcade” in their titles or descriptions. If you perform the same search in Chomp you will receive a completely different list of games that is much more relevant – for instance, actual arcade games!
What does this mean for game developers?
As a developer, you should feel giddy about this acquisition! Most app developers have been waiting (impatiently) for such an upgrade because this means their apps have a better chance of reaching the users who want to use them. For a long time app developers and app promoters alike have universally recommended that Apple improve its ranking algorithms and search results for discovering apps. Apple’s current systems are archaic relative to how content discovery works on other popular platforms, relying on velocity of downloads and verbatim keyword matches. With improved rankings, the true value of user acquisition can be accepted by Apple and given their proper placement. In attempt to temporarily fix the issue, Apple launched Genius – a feature that suggests apps to users based on their current apps and the apps used by others with similar tastes. Although the intention was good, Genius required extra work for the user and thereby never made a big enough splash for developers to pay attention.
Other Chomp headlines
Chomp and Verizon reached a deal last September in which Chomp agreed to power search for Verizon’s app store (Venture Beat). Although for Android, the motive behind Verizon’s deal was similar to Apple’s – they too wanted to improve app discovery for users! As of today, Chomp is still available as a standalone app on both iOS and Android, as well as the Verizon app store but their futures are in question. Traditionally after acquisitions, Apple has shut down services on competing platforms and implemented them exclusively on their own products. It isn’t official but I would expect them to do the same in this case, living up to Steve Jobs’ vow to “spend every penny of Apple’s $40 billion in the bank, to right this wrong.” In other words, they’re looking for ways to crush the Android.
The big question is will it work?
It’s certain that if you are an iOS user you can expect improved discovery in the near future. Android users may also get an upgrade but I wouldn’t expect the solution to be Chomp, even if you are on Verizon’s network. In my opinion, Chomp does not have any reason to fail unless it is isolated like Genius. To make this venture with Chomp successful Apple needs to avoid branding the Chomp experience as an added feature that requires extra learning. Instead, they should simply build the technology into the natural search process and alert users that the process has changed. From there better search results, rankings, and features will take care of the rest.
As app promoters we are very pleased to see Apple make this move. In September 2011, we published a study that proved incentivized traffic can be more valuable than organic – you can read the full report here. A better app discovery process will better reward promoters who have the ability to focus on quality as well as velocity, whereas today’s App Store emphasizes velocity.
