What the Top 50 Apps Do with IAP that the Rest of Us Don't (White Nights Conference St.Petersburg 2016)

1. WHAT THE TOP 50 APPS DO WITH IAP THAT THE
REST OF US DON’T
Reach Ÿ Engage Ÿ Earn
MIKE HINES
DEVELOPER EVANGELIST, AMAZON
@MikeFHines mikehines45
mihines@amazon.com

2. CREDIBLY INNOVATE PHOTO HERE
WHITE NIGHTS
ST. PETERSBURG 2016
TODAY’S AGENDA
How the Top 50 Did With IAP
What They Do Differently
When to Put IAP on Sale

3. SELL IN 236 COUNTRIES AND TERRITORIES

4. Android
Devs
iOS devs Amazon
Fire OS
41%
48%
60%
% Developers above Poverty Line
Source: Developer Economics Q3 2014 © VisionMobile, All Rights Reserved
How do we get more
Developers earning
more revenue?
An app must make more than $500 per month
if it is to fund future app development and
marketing.
$500 per month is the app poverty line.

5. Appstore Programs and Promotions
Overview
5
How the Top 50 apps did
vs. the rest of us

6. COHORT ANALYSIS
Group A: Top-50 Grossing
Source: Amazon Appstore, March 2014
Group B: Rest of Freemium

7. DAY 1: INSTALLS
Group A: Top-50 Grossing
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iiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiii
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Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
iiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiii
100100
installed

8. DAY 1: ACTIVE USERS
Group A: Top-50 Grossing
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
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Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
Iiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiii
4142
In
active
5958
active

9. DAY 1: UNINSTALLS
Group A: Top-50 Grossing
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiii
Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
Iiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiii1318
uninstalled
5958
active

10. DAY 1: PAYING USERS
Group A: Top-50 Grossing
iii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiii
Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
iii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiii1318
uninstalled
5958
active
33
paying

11. 2.6
2.9
Source: Amazon Appstore, March 2014
DAY 1: ENGAGEMENT
Group A: Top-50 Grossing
iii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiii
Group B: Rest of Freemium
iii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiii1318
uninstalled
5958
active
33
paying
# of sessions / active
session length / active
(minutes)
× =
avg. session length
(minutes)
6.9
7.4
1822

12. 6.9
7.4
2.6
2.9
DAY 1: REVENUE
Group A: Top-50 Grossing
iii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiii
Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
iii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiii
=×
# of items / paying
100%
112%
avg. selling price
100%
136%
100%
154%
ARPPU
1318
uninstalled
5958
active
33
paying
# of sessions / active
session length / active
(minutes)
× =
avg. session length
(minutes)
18
22

13. Source: Amazon Appstore, March 2014
1 DAY LATER…
Group A: Top-50 Grossing
ii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiii
Group B: Rest of Freemium
ii
Iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiii
# of sessions / active
session length / active
(minutes)
×
avg. session length
(minutes)
1725
uninstalled
3437
active
11
paying
=×
# of items / paying
100%
106%
avg. selling price
100%
107%
100%
114%
ARPPU
6.7
7.7
3.2
3.5
21
27=
# of sessions / active

14. 3 DAYS LATER…
Group A: Top-50 Grossing
iiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiii
Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
iiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiii
# of sessions / active
session length / active
(minutes)
×
avg. session length
(minutes)
1928
uninstalled
1923
active
=×
# of items / paying
100%
107%
avg. selling price
100%
122%
100%
131%
ARPPU
5.9
7.9
2.6
3.2
15
25
=
# of sessions / active

15. 1 WEEK LATER…
Group A: Top-50 Grossing
iiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
iiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiii
# of sessions / active
session length / active
(minutes)
×
avg. session length
(minutes)
2032
uninstalled
1418
active
=×
# of items / paying
100%
102%
avg. selling price
100%
121%
100%
124%
ARPPU
5.7
7.4
2.6
3.2
15
24
=
# of sessions / active

16. 2 WEEKS LATER…
Group A: Top-50 Grossing
iiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
iiiiiiiiiii
iiiiiiiiiiiiiiiiiiiii
# of sessions / active
session length / active
(minutes)
×
avg. session length
(minutes)
2134
uninstalled
1014
active
=×
# of items / paying
100%
111%
avg. selling price
100%
108%
100%
120%
ARPPU
5.7
7.3
2.5
3.1
14
22=
# of sessions / active

17. 1 MONTH LATER…
Group A: Top-50 Grossing
iiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
iiii
iiiiiiiiiiiiiiiiiiiiiiii
# of sessions / active
session length / active
(minutes)
× =
avg. session length
(minutes)
2236
uninstalled
48
active
=×
# of items / paying
100%
103%
avg. selling price
100%
128%
100%
131%
ARPPU
5.9
7.3
2.4
3.1
14
23
# of sessions / active

18. Hours Since App Download
IN-APP PURCHASING BY HOUR
Source: Amazon Appstore, March 2014
0 24 48 72 96 120 144 168 192 216 240 264 288

19. PRICE INCREASES OVER TIME
Days User Owned App
80%
90%
100%
110%
120%
130%
140%
150%
160%
170%
1 4 7 10 13 16 19 22 25 28
Source: Amazon Appstore, March 2014
+60%
average
selling price

20. WHAT WE LEARNED
The top have higher average price points
You can charge more in the right place and time.
Session length and count are important
Retention is not the only important metric.

21. Appstore Programs and Promotions
Overview
21
What the top 50 do differently
-- Selling

22. THE TOP DEVELOPERS KNOW THE NUMBERS
?
ENGAGE
CUSTOMER
EARLY
MAKE IT
EASY TO
COME BACK
GIVE THEM A
REASON TO
COME BACK
37% of users who will purchase, purchase
on the first day
48% of repeat purchases happen within one
hour of a previous purchase
64% of revenue comes from 3rd order +
74% of revenue occurs after first 7 days
56% of revenue occurs after first 30 days

23. 2016 Swrve data shows
17% OF PAYING
USERS BUY 3+ ITEMS
In any given month.
© Swrve 2016 Mobile Monetization Report – used with permission

24. THE TOP DEVELOPERS KNOW THE NUMBERS
?
ENGAGE
CUSTOMER
EARLY
MAKE IT
EASY TO
COME BACK
GIVE THEM A
REASON TO
COME BACK
37% of users who will purchase, purchase
on the first day
48% of repeat purchases happen within one
hour of a previous purchase
64% of revenue comes from 3rd order +
74% of revenue occurs after first 7 days
56% of revenue occurs after first 30 days

25. Apps with tutorials that introduce IAP
items
HAVE A 2.5x HIGHER
CONVERSION RATESource: Amazon Appstore, July 2013

26. Apps showing users how to “consume”
GET MORE REPEAT
ORDERS
Games that providing a post-purchasing tutorial
generated 65% more repeat orders than the
market average.
Source: Amazon Appstore, March 2014

27. Games with bigger selection
RECEIVE MORE
ORDERS PER
CUSTOMER
Developers that add new items regularly are able to
re-engage their paying customers. 1.14% of the
customers generate 30% of sales.
Source: Amazon Appstore, March 2014
69%
100%
145%
1-5 Items 6-10
Items
11-15
Items
ARPPU by # of IAP items for sale

28. Conversion Rate
INDEX: Average = 100%
DON’T CONFUSE YOUR CUSTOMER
OFFER VARIETY,
BUT NOT TOO MUCH
Source: Amazon Appstore, March 2014
147%
101%
52%
0%
50%
100%
150%
200%
1-5
Price
Points
6-10
Price
Points
11-15
Price
Points

29. Where do apps
GENERATE
THE MOST
REVENUE
A 2016 study by Swrve
shows that disproportional
revenue is generated from
higher end price points.
© Swrve 2016 Mobile Monetization Report – used with permission

30. To sell more IAP items,
BE CLEAR
ABOUT VALUE
Make it obvious what the
benefit is for buying different
price items. Confused
customers don’t buy anything.

31. More than ever it pays to,
TAKE CARE OF
YOUR BEST
CUSTOMERS
The top apps communicate directly
with their top customers to keep them
happy and engaged.
© Swrve 2016 Mobile Monetization Report – used with permission

32. WHAT WE LEARNED
Games with bigger selection
RECEIVE MORE ORDERS
Tutorials that introduce in-app items
HAVE HIGHER CONVERSION
Showing users how to “consume”
GETS REPEAT ORDERS
Treating in-app items like a catalogue
MAKES IT EASY TO SHOP
1.14%
of paying customers generate
30% of sales

33. Appstore Programs and Promotions
Overview
33
What the top 50 do differently
-- Engagement

34. REDUCE BARRIERS TO FREQUENT USE

35. Tuning Game Difficulty
WILL ENCOURAGE
LONGER SESSIONS
Too hard, and users will abandon. Too
easy, and they can get bored. Just right,
and it becomes addictive!

36. When you communicate with
them…
ADVOCATES
DRIVE
RETENTION

37. Appstore Programs and Promotions
Overview
37
Adopting Social
CAN CREATE BUZZ
AND KEEP USERS
ENGAGED
This will result in more friend-to-friend marketing
as players share their achievements and ranks.
Players will also compete with friends and leaders
and stay engaged.

38. Appstore Programs and Promotions
Overview
38
Leaderboards and
Achievements are
THE MINIMUM BAR FOR
SOCIAL ENGAGEMENT

39. User
Acquisition
Alternate
Revenue
Content
Creation
Influencers
Monetization
Loop
Game
Loop
TURN PLAYERS
INTO FANS
The Top 50 apps

40. Design IAP into the
fabric of your game
MAKE IT
EASY TO BUY
Offering ways to buy your IAP
items when they are needed
will increase conversion.
Apps that made it easy to shop
INCREASED REVENUE 75% (ARPPU)
Source: Amazon Appstore, March 2014

41. WHAT WE LEARNED
Add social and tweak game difficulty to
INCREASE TIME AND COUNT OF
SESSIONS
Cater to your best and longest customers with clear value
DIFFERENTIATE YOUR IAP CATALOG
Make IAP items
EASY TO BUY WHEN THEY ARE NEEDED

42. IF YOU ONLY DO ONE THING…
Cater to your best and longest customers
DIFFERENTIATE YOUR IAP CATALOG

43. IF YOU ONLY DO TWO THINGS…
Cater to your best and longest customers
DIFFERENTIATE YOUR IAP CATALOG
Make sure your IAP catalogs are
CLEAR ABOUT VALUE

44. WHEN TO RUN A SALE

45. When NOT to run a sale
SALES CAN HURT IF THEY…
…train users to wait for sales
…postpone future revenue
…don’t increase revenue
…don’t retain users

46. How developers make sales work
SUCCESSFUL SALES HAVE…
…irregular cadence
…timing when user inventory is low
…ways to absorb new purchases

47. Case Study
WHAT GOES ON SALE?
Soft currency in terms of real $
or
IAP items in terms of soft currency?

48. Case Study
WHAT GOES ON SALE?
An IAP item and its cost

49. Case Study
WHAT GOES ON SALE?
My Inventory of soft currency

50. How developers make sales work
SUCCESSFUL SALES HAVE…
…irregular cadence
…timing when user inventory is low
…ways to absorb new purchases

51. Case Study
WHAT GOES ON SALE?
Put IAP items on sale to absorb soft
currency inventory

52. WHAT WE LEARNED
For Sales without the remorse
INVENTORY MANAGEMENT IS CRITICAL TO
SUCCESSFUL SALES
To absorb in game currency
INTRODUCE NEW CONTENT
To avoid training users to wait for sales
TIME SALES USING OBJECTIVE TRIGGERS

53. Learn more:
http://bit.ly/Top50IAP
http://developer.amazon.com/underground
How did we do:
http://bit.ly/topiapsurvey
Follow us:
@MikeFHines
developer.amazon.com/blog

54. AN ALTERNATIVE TO IAP
-- AMAZON UNDERGROUND

56. A NEW SHOPPING APP
DISTRIBUTING
#ACTUALLYFREE
APPS
Turn 100% of your Android users into
revenue-generating customers
Developers waive fees on apps
and In App Purchase items.
Customers get #ActuallyFree
apps!
Amazon pays developers for
cumulative minutes customers
spend in an Amazon Underground
app.

57. AMAZON UNDERGROUND
HOW IT WORKS
• Customers go to Amazon and
download the Amazon
Underground shopping app
• Customers download your app
from Amazon Underground
• Total user minutes are multiplied by
our payout ratio
• Developer is paid

58. AMAZON UNDERGROUND
HOW WILL IT WORK
FOR YOU?
• Back-of-the-napkin
• Back it out of ARPU
$0.002
for every user-minute
$0.12 per hour per
user

59. AMAZON UNDERGROUND
HOW WILL IT WORK
FOR YOU?
• Back-of-the-napkin
• Back it out of ARPU
10K Users
150K Minutes
150K x $0.002 = $300

60. REVENUE = SESSIONS X MINUTES X RATE
For 100% of your users Every minute they use your app
http://bit.ly/undergroundcalculator

61. developer.amazon.com/underground

62. AMAZON UNDERGROUND
WHO IS ELIGIBLE
• Premium apps that will be free
• Freemium apps that make IAP free
Marketplaces with Amazon Underground
US
UK
Germany
France
Premium Apps
IAP Apps

63. AMAZON UNDERGROUND
WHO IS ONBOARD
Zynga
• Looney Tunes Dash!
MobiSystems
• Office Suite 8 Pro
Halfbrick Studios
• Fruit Ninja
Rovio
• Angry Birds Slingshot Stella

64. Learn more:
http://bit.ly/Top50IAP
http://developer.amazon.com/underground
How did we do:
http://bit.ly/
Follow us:
@MikeFHines
developer.amazon.com/blog