In-app purchases are driving a majority of mobile app revenues. In this webinar, learn how you can implement them in your own app and take advantage of the freemium app push to grow your revenues. This webinar was hosted by the Verizon Developer Community (http://developer.verizon.com) and moderated by the Wireless Industry Partnership (http://wipconnector.com).

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10. US Android Market Downloads, March 2012 (in Millions)
Free (99.1%)
Paid (0.9%)
Source: Xyologic, April 2012 Report

11. US iPhone App Downloads, March 2012 (in Millions)
Free (87.4%)
Paid (12.6%)
Source: Xyologic, April 2012 Report

14. Source: AppAnnie.com

15. Source: Distimo, VDC Conference 2011

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20. Average price of Top-Grossing Apps, January 2012
Source: Distimo

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40. IAP Tips and Tricks
VP of Production - Sean Thompson
@seanethompson

41. About Mobile Deluxe
• Mobile Developer since 2003
• Apr. 2010 - Started Free transition
• Dec. 2010 – Released free Solitaire
Deluxe®
• July 2011 – Overall free revenue>paid
revenue
• Driven by Solitaire Deluxe® (iOS) and
Daily Blackjack on Verizon (Brew).

42. Free Transition
• Regardless of company size, going free
requires a leap of faith.
• Many large, legacy developers still have
not embraced free.
• It’s easy to quantify paid LTV.
• Net Revenue from the Purchase is LTV.
• Free LTV has more possible outcomes.
• You control your LTV: based on Retention
and Monetization

43. Why free?
• Current App Stores are open markets;
anyone can enter.
• Apple App store: 725,000+ apps
• Google Play: 450,000+ apps
• Amazon Appstore: 30,000+ apps
• Premium or Free, you need users to
download your app.
• In a huge catalog, you are responsible for
getting your app noticed.
• Easier to acquire users on a free app.

44. Why IAP?
• Ad supported model is entirely
viable, but ad revenue will fluctuate.
• Based upon the supply of ad impressions
in apps and demand of ad purchasers.
• IAP gives you more control over your
revenue stream.
• IAP allows merchandising opportunities
(sales, bundles, etc.)

45. Case Study
• Brew Daily Blackjack
• Converted from Premium app to Free
app in May 2010.
• Uses Verizon AVB for IAP
• Downloads increase 3000%+
• Revenue increased 500%+
• Unseated Tetris as Top Seller

46. A Simple Equation
LTV > CPA

47. A Simple Equation
LTV > CPA
To be successful, the average Lifetime Value
(LTV) of a user must be greater than the
average cost of acquiring a user (CPA).

48. 5 keys for LTV>CPA
1. Live App: Your app is a service
2. User Acquisition: BYOU
3. Analytics: Ignorance is not bliss
4. Social Interactions: A must have
5. Research: Do Your Homework

49. Live App:
Your app is a service

50. Live App
• Paradigm shift from “Release and Move
On” to “Release, Evaluate & Iterate”.
• Iteration is required to get your app
properly tuned.
• Beta test to make sure you are ready for
prime time.
• Bug fixing = happy customers = good
ratings = more downloads.

51. Live App
• Think about post-launch content releases
when you design your app.
• New content keeps users engaged.
• Engaged users are more likely to be
retained.
• App updates are chance to re-engage
lapsed users.

52. User Acquisition:
BYOU

53. User Acquisition
• If your plan is
“I’m going to make a great game and [App
Store] will totally feature it,”
…you will most likely be disappointed.
• A free app with no UA activity will get <
100 DL a day.
• You must BYOU (Bring Your Own Users)!
• You must develop a UA strategy!

54. User Acquisition
• How we acquire users:

55. User Acquisition
• You need thousands of downloads a day
to yield sufficient paying users.
• Far less than 5% of users pay.
• Non-payers can still be valuable.
• Experiment with different channels and
measure the results.
• All users are not created equal
• Pay close attention to value of users by
channel.

56. User Acquisition
• Social/Viral user acquisition is vital.
• Every User you get for free reduces
overall CPA
• If you have multiple apps, cross-selling
between them is critical.
• If you can pay once for a user in 2
apps, that reduces CPA.
• Look to ad-swap with fellow developers.

57. Analytics:
Ignorance is not bliss

58. Analytics
• Analytics are not a substitute for
creativity.
• Retention charts won't magically give you
a killer app idea.
• User data won't write your code for you.
• A/B testing isn’t an art style.
• However…

59. Analytics
• Analytics are critical to creating a
successful app.
• First level of analytics tells you about
general app usage.
• Second level of analytics helps you
answer questions about why. Cohort
analysis, funnels, etc…
• Given the iterative nature of free
apps, good data is actionable data!

60. Analytics
• Some KPIs (Key Performance Indicators) we
use:
• Daily/Monthly Active Users (DAU/MAU)
• $/DAU (or ARPDAU)
• Retention Rates
• LTV
• $/DL
• CPA (Direct and Blended)
• Cross Sell %

61. Analytics
• Who to use?
• Flurry
• Kontagent
• Mixpanel
• Localytics
• Social Game Network (segue to…)

62. Social Interactions:
A Must Have

63. Social Interactions
• Why go social?
• Acquisition
• New users can discover you via Social Feeds
• Engagement
• Users are more likely to participate with
friends.
• Monetization
• Wooga’s Diamond Dash on iOS – FB Connect
users are 8X more likely to spend.

64. Social Interactions
• Who to use:
• Facebook
• Twitter
• Game Center
• GREE/OpenFeint
• Playphone
• Papaya
• Mobage
• Viximo

65. Social Interactions
• What to look for in a social game
network:
• Feature list
• Cost
• Analytics included
• Cross-Platform

66. Research:
Do Your Homework

67. Research
• General Industry News:
• @kimmaicutler – TechCrunch
• @deantak – VentureBeat
• @InsideNetwork – Inside Mobile/Social
• @pgbiz – Pocket Gamer UK
• @AllThingsD – WSJ/All Things Digital
• @SAI – Sillicon Alley Insider

68. Research
• Analytics:
• The Flurry Blog: http://blog.flurry.com/
• Kontagent Kaleidoscope:
http://kaleidoscope.kontagent.com/
• Distimo Monitor Blog:
http://monitor.distimo.com/app-store-analytics-blog
• Caryl Shaw Presentation:
http://www.slideshare.net/caryl_shaw/would-you-like-some-
data-with-your-coffee-aka-the-key-analytics-you-should-start-
every-day-with-10031647

69. Research
• Free Revenue Models:
• Gamesbrief Free-to-Play spreadsheet:
http://www.gamesbrief.com/spreadsheet/
• Dub It - Social Gaming Glossary:
http://www.dubitplatform.com/blog/2011/12/31/the-2012-
social-gaming-glossary-15-of-the-most-important-social-game-
jargon/
• Social Interactions:
• FB Developer Showcase:
https://developers.facebook.com/showcase/diamonddash/

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