In our post roughly 10 weeks ago we detailed Air Horn (Free!)‘s 8-day stay in the coveted #1 spot in the App Store. We promised to follow up and provide additional data and further insights. This simple app turned any iOS device into a loud and obnoxious air horn and netted Simpaddico, the app’s developer, $20K in 8 days. We were quite surprised when the app stayed in the Top 25 for the next 5 weeks, receiving over 3.5MM downloads in that period and netting Simpaddico over $100K. At its peak, Air Horn was getting over 188K downloads per day and never fewer than 30K downloads per day. The daily ranking and download data can be downloaded at the bottom of this post.
Although it’s easy to see the relationship between daily downloads and an app’s ranking to predict the number of future daily downloads, it’s nearly impossible to predict how an ad network will perform on any given day. The volatility involved in app advertising is startling (see the chart below for eCPM rates from a single ad network). For example, Air Horn’s daily weighted average eCPM ranged from $1.72 to $4.47, with the best performing ad network changing very frequently. Similarly volatile were ad network and ad exchange fill rates, ranging from 20% to over 90%. Even one that claims 100% fill rate was unable to fill all of the remnant ad requests.
With over 35MM ad network impressions, a small percentage drop (or increase) in eCPM had significant revenue ramifications for Simpaddico. Using Burstly’s ad management platform, Simpaddico was able to reach a $2.54 average eCPM for Air Horn. Had Air Horn run only one ad network, average eCPMs could have been as low as $1.25. Additionally, the number of ad impressions served would have been dramatically lower since no one ad provider has 100% fill. Due to these two factors, Burstly helped Simpaddico earn more from ads in Air Horn than it would have with just an ad network / exchange.
Although Simpaddico earned a substantial sum from ads in Air Horn, ad revenue was only 72% of Air Horn’s total revenue. The other 28% came from in-app purchases, also powered by Burstly. Out of Air Horn’s 4.0MM+ total downloads, roughly 1% of users opted to purchase the in-app upgrade that added additional sounds and removed ads. This conversion rate is over 2x higher than a cross-promotion that was run for a similar app created by Simpaddico (Annoying Sounds – 700K downloads, #5 Free App, Top 25 for 9 Days). Why? Because the in-app purchase occurs “in-the-app” while the cross promotion forced the user out of the app and into the App Store. This extra friction reduced the cross promotion up-sell conversion rate to an average of 0.4% for Annoying Sounds.
What does this mean for other indie developers?
The unpredictability of the app ecosystem today means you have to be ready to capitalize on opportunities as they occur. How do you do this? It’s imperative to diversify your income sources by using as many as possible (in-app purchases, ads, and cross promotion). For each income source, transparency and control are needed for you to run your apps as a business. For example, you should run as many ad networks as possible in your apps but have the ability to switch between them on the fly and target them to specific users if needed. Similarly, for in-app purchases, you should have the ability to present the user with different creatives and optimize based on which one gives you the best conversion rate.
Even if your app isn’t in the #1 spot… or even in the top 100, it’s still important to make sure you have the flexibility, transparency, and control needed to monetize your apps.
You can download the rank & daily download data for Air Horn here. [csv]