20bits by Jesse Farmer

I agree 100%, I couldn't have said this better myself.

I indeed thought the very same thing reading that open letter.

If you consider the store (so, the distribution mean) your only promotion then you are taking a very conservative approach to your business (evaluating a developer work at a whopping 200$/hr does not help their figures too, to be fair).

The App Store is a marketing place for iPhone OS-apps. Customers go to the App Store to choose a product that is available. The most sold applications in the App Store are also listed as the most sold. So if the app happens to sell good, then the app itself gets good exposure via the App Store.

The problem here is that it is 10 000 apps in the App Store and most of them are the apps for 0.99 USD. There is nothing wrong with a 0.99 USD app, but the amount of them and the possibility that one or many of them got sold in a high volume, makes the apps that cost more even harder to find for a customer.

"Lower prices aren't what convince you to buy Beyonce's new album at the record store, it's the other way around. Beyonce's multi-million dollar marketing campaign is what convinces you to go into the record store in the first place."

Yeah, that's true with music that has more channels to get distributed. But, Apple doesn't allow this for iPhone OS apps. So, the App Store has to have a better way for developers to market the apps they develop.

My suggestion to Apple is to reorganise the way App Store present apps. The categories are great, but there should also be a top 10 and listings of apps after their price.

eg. in the category Games the App Store customer can sort the apps after price and even get a top 10 list for all games in that pricepoint.

Katus,

You're confusing distribution and marketing. The App Store solves the distribution problem, but not the marketing problem.

The overall goal is to stimulate demand. You can do this by lowering your price or by marketing.

Now, it's possible to "market" your book, album, or whatever by sending it to the distributor and using your placement in their store as a means to capture people browsing, but you will do poorly. Why? Because the store wants to promote the stuff that sells best, and if you're not stimulating demand outside the distributor the only way to do it inside the distributor is by lowering your price.

This is exactly what we're seeing in the App Store.

Instead, developers should be spending time running marketing campaigns outside the App Store that stimulate demand that way and drive people INTO the App Store, rather than relying on the people who were just browsing.

I agree that developers should put down at least the same amount of money and time in marketing as with the product development. And many developers do that.

But, as an iPhone developer I know what Apple has promised what the App Store should be. I can't submit an application without proper marketing material include with the app btw.

So, in Apples eyes, the App Store also works as a way to market the app. But, the way they allow this today is flawed. An 0.99 USD app gets more exposure in the App Store for getting sold in an higher volume then an app that cost more. And Apple rates popular apps after volume and not volume at different pricepoints. Today most of the apps in the App Store are 0.99 USD apps. So, the apps that cost more, and by that way, got sold in a lower volume then an 0.99 USD app does, makes it an unfair marketing system in App Store.

The way a customer has to buy an app is via the App Store in iTunes and iPhone/iPod touch. And Apple only sort apps after volume and not after volume and pricepoint.

So it's harder for an customer to find an application with a higher pricepoint in the App Store. And that's not right and it is a problem Apple can fix easily.

As I said, I agree with you that developers has to do marketing campaigns to get customers into the App Store. But the way a typical iPhone OS customer gets apps today, is by going for the top 10 apps that Apple has on display in the App Store.

Another problem with the App Store and the way to be able to sell apps with a higher price, is that there is no way to distribute a demo of your app. Many customers doesn't see that as a problem with an 0.99 USD app (they don't loose that much i the app is crappy). But, there are ways to solve that (a free Lite version and a highpriced Pro version). The problem with this solution though, is that it's not a satisfactory way for a developer to present their work. No developer want's to make crippleware just to be able to sell an as intended working app.

What Hockenberry suggest to solve this, is that Apple allows the distribution of a demoversion of the fully functional app. For no customer want's to buy a Car without test driving it first.

“But, as an iPhone developer I know what Apple has promised what the App Store should be. I can't submit an application without proper marketing material include with the app btw.”

Where did you get the idea that Apple would promote and advertise your product for you? You thought since Apple requires you to submit marketing materials with your apps, that meant they would create a marketing campaign for you? Those materials are just for the App Store. Besides, just how is Apple supposed market 10,000+ applications fairly, equally, and objectively? They can’t, except to do what they’re already doing. Which is to present the apps sorted by popularity, or to let you search the categories. For Apple to conduct app promotion, they’d have to be selective on which apps to promote (again, they can’t promote them all). This means some apps would have to be left out in the cold. Then Apple would be criticized (or even sued) for promoting one app over another.


“The way a customer has to buy an app is via the App Store in iTunes and iPhone/iPod touch. And Apple only sort apps after volume and not after volume and pricepoint. So it's harder for an customer to find an application with a higher pricepoint in the App Store. And that's not right and it is a problem Apple can fix easily.

You’re assuming crappy apps are cheap, and non-crappy apps aren’t. And you’re assuming consumers think the same way and equate high price with high quality, and will buy based on that. These are not good assumptions. People are naturally price-sensitive, and risk-averse. Premium, higher-priced apps must be actively marketed to communicate their value, reduce customer fears of risk, and create demand for them. You can’t expect consumers to search the App Store for price points, stumble onto your product, and then buy it just because it’s pricey. A few might, but most won’t.

And what are you going to do when there are hundred’s of apps priced the same as yours? You’ll be right back where you started. There’s no fair or objective way that Apple can promote your app or make it easier to find over everyone else’s. You’ve got to market your own app outside of the store.


“But the way a typical iPhone OS customer gets apps today, is by going for the top 10 apps that Apple has on display in the App Store.”

Obviously, there is only room for 10 apps in the top 10. All the more reason you need to market outside the store. Waiting for Apple will do something to make your application stand out from the others is delusional. People assumed since its now somewhat easy to create an iPhone app and distribute it, that means its easy to sell it. Not true! In economics, there’s something called “barriers to entry”. It refers to how easy or hard it is for someone else to get into the business you’re in. Right now, anyone can develop an iPhone app and get it in the App Store. Low barriers to entry means more competition, which leads to lots of products and low prices. When there’s lots of products in the store vying for consumers’ attention, you’ve got to create market demand for your product outside the store. Doing it in the store won’t work unless you’re willing to compete on price, or pay for ideal shelf placement. Manufacturing your product and shipping it to the store is not enough. This is what developers don’t understand.

“What Hockenberry suggest to solve this, is that Apple allows the distribution of a demoversion of the fully functional app. For no customer want's to buy a Car without test driving it first.”

This still won’t completely solve the problem. You will still need to advertise your demo outside the store so that people are compelled to test drive it. If you are really serious about an iPhone application business, I highly recommend taking a marketing and/or advertising night course at a local community college. You’ll understand the concepts that the OP refers to. You’ll find out how consumers determine value, how they decide what to buy, and under what situations they resort to buying on price. You’ll also find out how to identify and target potential buyers, and how to reach them (web ads, magazine ads, focused campaigns, etc). You also understand why adding the ability to search by price won’t solve the problem completely (consumers simply don’t shop that way for unknown apps). The course will pay for itself very quickly, because you’ll have a huge advantage over most iPhone developers who won’t necessarily understand the business side.

There sure are other ways to market your product. You might buy it from the AppStore but you can market an app any way you like. Some folks are doing this through reviews, I've learned about some great apps that way. You can also put your app "on sale" (not necessarily $0.99 but something off the regular price )and get it on dealmac. You could try pop-up ads. I'm not an iPhone developer, why should I have to think of these things? Marketing has been going on for more than a thousand years, it's not that hard to figure it out.

Yes, reviews and exclusive previews are effective and a zero-cost way to market an app.

“The App Store is a marketing place for iPhone OS-apps.”

No, the App Store is only a distribution point for iPhone apps. Marketing is not a passive activity, as in waiting for someone to enter a store and hoping they make it to the shelf where your product is located, or flashing them a sign about your product. Marketing is active; you find ways to make people desire something you are selling, and then compel them to find a store where they can buy it. To do this, you identify and target groups and types of people who might be interested in your product (marketing). You then find appropriate and creative avenues to contact and inform them of the value of your product, why its better than everything else, and why they can’t live without it (advertising). This can’t be done in the App Store. It must be done outside.


“Customers go to the App Store to choose a product that is available.”

True. That’s because very few developers are marketing to the customers outside the App Store. So customers have no choice but to go to the store to see what’s available. Developers just wait for customers to wade and scroll through thousands of apps, and hope customers stumble across their apps. This isn’t marketing.


“Yeah, that's true with music that has more channels to get distributed. But, Apple doesn't allow this for iPhone OS apps. So, the App Store has to have a better way for developers to market the apps they develop.”

You’re saying that since the App Store is the only place you can buy iPhone apps, it must be the only place you can market them. This is faulty reasoning which only serves to limit you. A store is NOT the place to concentrate your marketing efforts. You can’t market in a store. That’s not what marketing is. The App Store is just a store. If you wait for consumers to go to a store to find out about your product, you won’t sell many unless its very cheap. Instead, you need to educate consumers about your product before they get to the store. This is what marketing is.

Clearly AP and I are on the same page. The passive vs. active is a good one.

This ties in with a previous article of mine, The Cult of the Product.

Inexperienced entrepreneurs, especially internet entrepreneurs, think, "Build it and they will come."

They won't come unless you make them want to come. That's marketing.

I think what you say is obvious for the most part. Devs can't rely solely on marketing through iTunes. It's still important to get the word out through reviews and word of mouth.

However, I think you miss a couple of nuances, and that is marketing and distribution are not mutually exclusive.

Walmart has a lot of say over what products to place where, giving prominence to some and not others. I imagine some manufactures pay a lot to put their items in a highly visible place though fortunately, iTunes doesn't indulge in this pay-to-play scheme. The point is, Walmart is not just a distributor, and neither is iTunes.

Borders aren't just going to put the most popular (inexpensive) books upfront but mix them in with ones that have higher margins. Two book publishers may want to compete on price, but Borders can't make much money off them alone. It behooves Apple to sell the more expensive apps.

Ultimately, you are right. Devs are most responsible for their marketing. I think people thought maybe the AppStore would be easier, different path to glory than the usual hard work needed to sell. Perhaps at first this was the case.

Still, I think both Apple and devs could work something better out to both their advantages.

Bud,

Good points and I agree completely.

"Still, I think both Apple and devs could work something better out to both their advantages."

I do too. And the open letter to Steve Jobs about this is a step in that direction.

The magazine/website Mental_Floss recently came out with a 2.99 trivia app. They say, "To celebrate its premiere, each of this week’s Lunchtime Quizzes are based on the Big Fat Lies game." Now that's marketing.

http://www.mentalfloss.com/blogs/archives/20826

I know it's been said, but the whole thing would be helped tremendously by the simple ability to have demo versions of apps. I think that is the biggest driver of popularity to these cheap or free apps. If devs could offer a free limited demo, users would be willing to try out an expensive app. I'm a dev and a user and I see myself hesitating on pay or expensive apps just to try them. If there were free demos, the crapware that sells for 99 cents wouldn't rise so high.

Yeah, I don't disagree. Is there any way for a third party to do this, do you think?

are you actually a developer? Marketing an App is not worth the effort , unless you have a $10 or more app, you will spend more time, money and resources then you will gain. Any PR, sales gimmick, or even advertising is a money loser for a product under $10. Your better of just making your product better, taking care of your customers, and doing what you love, make great software.

nsuser,

The original author was complaining that he feels compelled to lower his price because he's competing with an ocean of $0.99 apps. IMO, his mistake is treating the App Store as the main marketing channel for his app. But the only way to increase demand in *that* environment is to lower your price, so of course every app is cheap as hell.

Instead, if developers want to charge more for their app, they should go about raising demand externally.

You're 100% on target with this as far as you've taken it. There is another issue and that is customers need a way to try before they buy. Shareware, demoware and such made this possible in the past with desktop applications. Some App developers have figured this out and they offer Free or Lite versions. I have downloaded many of these, tried them and then bought the ones I liked and found worth the upgrade to the full version. The model works and makes the App Store be both a marketing and a distribution channel.

Jesse, the problem isn't us knowing about marketing. It's being able to measure its effectiveness. If we advertise in 10 different places with 10 different rates, all we see it a jump in overall sales. We don't know which of the marketing channels is giving us the most bang for our buck.

It's like the publisher telling you that 10,000 books were sold. But not that 9,000 of them were at Wal-Mart and 1,000 of them were at Borders.

Some more about this subject here: <http://appcubby.com/blog/files/financial_realit...>

-ch

Craig,

Sure. I don't know how many other articles of mine you've read, but this blog is all about quantitative marketing and product development, so I understand the issue quite well.

Besides, my point isn't so much that app developers aren't being quantitative about their marketing strategy, it's that they're relying on the App Store to do their marketing for them.

For example, I'm totally willing to pay $10, $20, or even $50 for an app that does something seriously awesome. How comes nobody is building these apps and targeting ads at people like me?

I've not seen one ad for an iPhone app, ever. Every app I've bought is because a friend mentioned it to me.

If you're not even reaching the right audience quantitative marketing will just be a local optimization. You're still missing the mountain of users elsewhere who don't demand $0.99 apps (note: that this mountain exists is only a hypothesis, but I'm sure that nobody has hit it yet, if it does.)

Besides, even if you're not given precise measurements, that just means you have to go slower. Test one marketing channel at a time. You'll hit cross-channel effects once you start being more aggressive, e.g., one person belonging to two different audiences, but some data is better than none.

Jesse,

Based on your reply, I'm assuming you didn't read the blog post Craig references above. I'm an iPhone developer and the author of that post. I did my best to test various marketing efforts and that post is reasonably in-depth analysis of what I've learned. I'd be very interested to hear your thoughts/critique on my efforts.

david
App Cubby

Hey David,

I did read through your article. My core hypothesis with respect to the app store is two-fold: first, most iPhone users don't regularly browse the App store, and second, there are large untapped segments of iPhone users.

Now, I can't speak about your specific situation. I don't know the nitty gritty details. But, for example, if I Google "iphone save gas" or "iphone gas app" your Gas Cubby app doesn't come up. So it seems SEO is at least one marketing channel in which you have room to improve.

Maybe this is a worthwhile exercise: write down all the ways people can find your app, and all the communities in which iPhone users are concentrated.

How can you improve your visibility for each of these? It sounds like you tried advertising and it didn't work. Was it because you didn't advertise to the right people? The right audience wasn't cost effective?

Just some thoughts.

Thank you for this great article and posts.

As a developer, I really would like to see more 3rd party websites for independent reviews and editorials.

On the AppStore itself, I think we also need more granularity and details in categories and of course a decent search with real keywords. For instance, my calculator & converter app is named CalcConv but cannot be found with 'calc' or 'conv'. I may need to change the name...

Anyway, all the best for 2009 !

Jesse, right on.

Also, what happened to the creative marketing campaigns of era's long forgotten. We could learn a thing from JP Barnum. Hockenberry is being a baby and thinks he deserves the world, wrapped in a bow and served in a silver spoon.

Totally true!

You got it absolutely correct here, and you're not alone. Will Shipley, the iconic dev for delicious monster, has been talking the appstore as warehouse since the last Macworld. Here's my take:
1. Hockenberry should take responsibility for marketing his own ideas.
2. Hockenberry should respect ringtone apps. In some contexts, they blow twitterific out of the water, without having 1/50th of the usefulness. IE, is Twitterific going to be a hit at a party? um, yeah. No.
3. Hockenberry has obviously forgotten what it's like to be a really small dev shop busting ass working two full time jobs to support iphone application development. We're working twelve-hour days so we can squeeze in time to build our own apps. And our apps have to be cheap. We don't have a cushy office and a full dev team to play around with.

Anyway, thanks for the wonderful article. More power to you.

Thanks for the kind words. Are you ever in the SF Bay Area?

Man I wish. Are you ever in Toronto? FutureRuby is coming up here soon, looks like we'll have lots of awesome people coming up for that.

I agree with you Jesse, but I think that the app store should not be responsible for marketing, that is up to the creator of the app itself, or up to their marketing firm. You cannot rely on an app to sell better then another one unless you get the word out. For example, I do word of mouth marketing if I like an app, and I am sure others do too. The store can only sell and highlight what has been selling. So what developers need is an app marketing channel... a job I would love to have as I am sure it is going to be booming soon.

I agree with what you are saying Jesse, but why would the app store want to market the apps, it does not seem like they need to yet, the money is just pouring in. I wonder how the revenue is divided, that would help me decide!

I disagree with you when you say that majority of i phone users dont even browse the app store. The apps are huge with iphone! Lowering the price would be very bad because then everyone would need to lower the cost to fit demands. Everything is fine how it is. If your app is good, it will be discovered and downloaded continuously. Dont lower your price to gain attention.

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This article is an oversimplification of the issue.

The developer in the open letter has top ranking Apps and knows what it takes to get an App there “via marketing.” The problem is that he is realizing that he can only make money with “low quality” Apps at a low price point. As a developer myself I came to the same conclusion.

I think that the main problem with the App Store is that it appears to rank Apps based on “total downloads” like music tunes. Problem is that Apps are not music tunes. An App that took a year to develop is not the same as an App that was developed over the weekend.

I believe the ranking of Apps needs to be based on total revenue not total downloads. This would benefit both developers and consumers. Consumers would be able to clearly see worthwhile Apps and developers would be encouraged to make them. This would allow all Apps to compete on equal footing and get the same level of "visibility."

Even though apps are so damn cheap they sell like crazy. Theres many people making a killing just making apps.