Fiscal Year 2009

$56.93 This is how much I've made in app sales for the past 6 months on FlashCardz & QuoteKeeper.

For the most part this is done with very minimal advertising. The majority of which come from the custom ads for chilidawgsoftware in Egg! (my free app).

As you may know, I also have free versions of both FlashCardz and QuoteKeeper that serve ads and generate revenue from ad clicks. So over the same 6 month period QuoteKeeper Free has generated $56.94 and FlashCardz Free brought in $15.00 for a combined total of $71.94.

One of the questions that I had at the beginning of all this was whether or not I would make more money with ad-supported free apps or from traditional paid app sales. The final answer is IT DEPENDS.

Depends? Depends on what? Well, I think it depends on the type of application. I made more $ from regular app sales on FlashCardz vs. the ad-supported version (more than double). I attribute this to the fact that people who use FlashCardz are most likely using it to study for something, so seeing ads at the top is distracting. So the demand for the paid version is higher than the ad-supported version of FlashCardz. The usage of the free version is actually very low.

However, the ad-supported (free) version of QuoteKeeper made more $ than the paid version even though the paid version was available more than a month earlier. In fact, the ad-supported version of QuoteKeeper more than doubled the revenue of the paid version. My view of this is that ads are more tolerable in QuoteKeeper because people are using it more casually.

What about Egg!? It is by far the most popular app. The ad revenue over the past 6 month period is $128.72; this accounts for 1/2 of my total revenues.

Although, QuoteKeeper and FlashCardz are valuable to people in their respective niches, Egg! seems to be more universally popular. Over the last half of 2009, a total of 3,258 people have downloaded Egg!.

At this point, it's about getting noticed. With over 140,000 apps on the app store and more being added every day, its easy to get lost. I consider myself fortunate that I can get people to see my other apps through the custom ads that show up on Egg!. I'm in the process of getting Egg! to update user's Facebook status as a way to generate more exposure. The idea comes from this blog post. Hopefully, by the end of next year (or sooner) we can add a lot of zeroes to the end of these numbers.

If I add up all app sales and all ad revenue, the grand total is $257.59 for the last half of 2009.

Setting Expectations

One of the mistakes I made when I first posted my apps to the App Store, was failing to set expectations. This is important because when people come across apps, they have all kinds of wild expectations as to what it is and what it should do. If what they expect doesn't match up with what they experience in the app, they will come away with a negative impression of the app, which leads to negative comments a lot of the time. So it is up to the developer to do what they can to set the proper expectations for their apps.

Let me illustrate with a couple of my own apps. When I first posted Egg!, I didn't want to spoil the surprise and tell everyone what was inside. So I posted it with this description:

Just tap tap tap to reveal what’s hidden inside the Egg!

I have since added the following:

Egg! is for those times when you’re waiting for the movie to start, stuck in a boring meeting, or for when you have to entertain a small child and don’t know any magic tricks.

Adding this line, gives Egg! more context and helps people understand some of the rationale for it.

For FlashCardz, I added this to the description:

When I was creating FlashCardz, I took a look at similar programs on the App Store, but none of them was what I was looking for. There were some apps out there that did more than FlashCardz, but that didn't really concern me. I didn't set out to make the Swiss Army knife of flash card apps with all the bells and whistles. I just wanted something clean and easy to use, that let me make flash cards on my iPhone. This is my niche. People that want more will choose the other stuff that's out there, but there will be many people that find FlashCardz meets their particular need.

People naturally compare similar things to one another, so here I try to differentiate FlashCardz from the other stuff that's out there and give my perspective on where FlashCardz fits in. If people come in expecting FlashCardz to do everything they will be disappointed, but if they understand that it's not trying to do everything, then they can focus on what it does do.

So whether you're making the next great iPhone app or not, setting expectations will help people understand you and your apps better and reduce the negative comments from mismatched expectations.

Fierce Competition

A recent Business Week story talks about how some companies are hiring marketing companies to promote their iPhone apps. They also mention another company that "appears to have solicited positive reviews through an ad on Amazon's Mechanical Turk, an online tool that farms out small tasks." The article goes on to talk about some of the limitations of the App Store in handling reviews, compared to other review sites.

The thing that caught my attention, was this line, "Some developers ask family and friends to post positive reviews. Others post negative reviews of competitors' applications." I've seen this negativity in a number of different places, with people slamming products without having used them. On the App Store, you have to purchase/download an app to review it, which is supposed to prevent this kind of thing. But, anyone can download a free app and post a negative review. My thought is, why spend the time or money to bash someone else, why not just make your stuff better? (OK, I recognize the the financial reward for bashing a competitor might be substantial, but show some character please.)

Before I started using mobclix, I can across this article. I read through it and went on to read the comments, where some people were bashing mobclix. The author of the article goes back and forth with some people posting negative comments. At one point the author says, "It is not vaporware. Do you work for one of mobclix's competitors? See update." It starts to get really bad when they question the author's journalistic integrity and professionalism. It's pretty clear that the competition is waging a major flame war.

The bottom line is, "who says it" and "why they say it" is just as important as "what they say." Unfortunately, most of the time we only get "what they say." (Don't necessarily take reviews and comments at face value.)

On a more positive note: Egg! seems to be getting a lot of new users, since it's release on Sept 3rd.

Making $ (Mobclix & AdWhirl)

There are a few ways to make money with iPhone apps. The traditional way is to release an app and charge for it. Another way that is gaining in popularity is to release a free app and generate ad revenue. I'll admit that the first time I downloaded a free app with advertisements that I was a little taken aback. Like most people I don't like commercials on the radio, on TV, on YouTube, on Hulu, or anywhere else on the Internet. (OK, Hulu commercials aren't so bad, compared to broadcast TV). So, when I saw ads on these iPhone apps, I didn't like it. That is of course, until the shoe was on the other foot.

When I was browsing on the internet one day, I found an article about generating revenue through advertisements. I thought it would be a nice experiment to create free (ad-supported) versions of my apps and see if they would generate more revenue than the paid versions. It's still too early to tell, but I will keep you posted as time goes on.

To do this experiment, I found a couple solutions, AdWhirl and MobClix.

AdWhirl was started by iPhone developers and had come up with a way to serve ads from different ad networks. This allowed for better fill rates so that there would always be an new ad served. Higher fill rates = higher ad revenues. There was even an option to post custom ads for people to promote their own apps. This appealed to me because I wanted to cross-promote my other apps. I incorporated the AdWhirl libraries in a development build to test it out and it worked as expected. AdWhirl was recently bought out by AdMob, one of the largest Mobile Ad companies.

I also looked at MobClix. I liked MobClix because in addition to the different ad networks, they managed your account with the individual ad networks, so you didn't have to have 10 different accounts with 10 different ad networks. They consolidate all your ad revenue in one place for you. MobClix also has superior analytics, so that you can track how well your app is doing in the app store and how much ad revenue it's generating. They recently added the ability to serve custom ads. If you have one of my free apps, you'll see my ads for chilidawgsoftware. One of the key benefits for developers is that the ad agencies bid on your advertising space, which means that you will get more revenue than if you were locked into one ad network. I've been very happy with MobClix and I use it in all my free apps.

As a developer, it's not easy to get people to look at your apps, and even when you do 1/2 the people don't like it, 3/8 are indifferent, and if you're lucky 1/8 might consider keeping it on their iPhone. The bottom line is advertising allows developers to provide free versions of their apps, that they might not otherwise make available. So don't hate the ads, just be happy that someone is paying developers for the work they do.

Marketing Failure

One of the sites I follow regularly is The Unofficial Apple Weblog (www.tuaw.com). It has been a great source of all things Apple. After my apps first came out, I thought that if I could just get mentioned on this site that my sales would go through the roof.

So, I e-mailed one of the guys that reviews iPhone apps on the site and suggested that they do a "Back to School" themed review for iPhone apps. I also mentioned my app FlashCardz.

Well, I never got a response; not even a "Hey that's a great idea." If you go to their site now, you'll see that they do have a new "Back to School" section where they review iPhone apps for students. And to put salt on the wound, they review someone else's flash card application. 

Now, I don't know if they were planning to do this all along or not. But I can imagine that guy I e-mailed sitting in a meeting and saying, "Hey, why don't we do a Back to School thing with iPhone Apps!"

Anyways, as far as marketing goes, that was a big failure.

UPDATE:
Tuaw has announced their iPhone app review guidelines. I'll test it out one of these days.