Gifting Apps - a New Promotional Tool for Developers?

About a week ago, Apple enabled gifting for apps. This got a lot of developers thinking about how gifting can be used for marketing purposes. We weren't the first ones to try it, but we decided to try it on a mass scale.

Our plan was to give away 1,000 copies of our game Harbor Master for iPhone to the first 1,000 subscribers to our newsletter. We coordinated this with promoting the upcoming Harbor Master HD for iPad.

We were lucky that TouchArcade picked up the story. We had our 1,000 subscribers within the first 10 hours, most within the first few hours.

The promotion elicited a heated reaction from the developer community. Some suggested this was a scam and feared for what could happen to the App Store if gifting affected rank and any developer could buy at Top 100 spot for a few hundred dollars. However, in our minds, this was similar to using a massive ad campaign to reach the top, which many larger companies already do. The only difference is that this method would actually be affordable for small developers like us.

Our opinion is that every entrepreneur needs to know how the market works. You learn how your market works by learning from the experiences of others, and by experimenting yourself. Gifting was a brand new technique, nobody had tried it, and we had a new game to promote. Our hunch was that gifting was not going to affect rank. But even so, it would be an exciting way to launch Harbor Master HD. We had spent lots of money in the past experimenting with different forms of advertising, and we saw this promotion as no different.

***

We began gifting on Friday morning. There were lots of rumors circulating around that gifting so many apps is impossible. While it's not impossible, it is difficult. All told, it took me 2 days to send 1000 gifts. Why did it take so long?

  • You're limited to 1000 characters in the address field, so we had to gift in about 20 batches.
  • iTunes would temporarily lock out our account for an hour every 1-2 batches. I'm guessing that they rate limit your purchases it to prevent fraudulent activity.
  • Visa locked our credit card twice because spending $100 on iTunes every hour looked a bit suspicious.
Over the course of Friday and Saturday, we sent out all the gifts. 54% were redeemed on the same day.

As we can see below, there was almost no effect on rank. The small visible bump can be entirely accounted for by actual increase in regular sales. If the 500 daily gifts counted as purchases, we would guess that we would at least be in the Top 25 of Strategy/Adventure, and in the Top 100 of All Games.


Image courtesy of MajicRank.

The App Store apocalypse so feared by other developers did not come to pass - a developer cannot influence their rank through mass giveaways. Since gifting has been available for music for a long time, my guess is that Apple learned this lesson a long time ago and discounted gifting from the ranking algorithm.

Overall, this was a great promotion strategy for us. We got over 1,000 interested mailing list subscribers, great media attention for Harbor Master HD, and a lot of good will from the community. People value a gift much more than a free app. While people tend to rate free apps much lower than paid apps because a free app has lower perceived value, the recipients of our gifts have been nothing but grateful.

While I'm not sure we'll do such a large giveaway again in the near future, simply because of the time required to do the actual gifting, it's another great option for developers to use in their marketing arsenal. If nothing else, it will be very helpful not to be limited to 50 promo codes when trying to share an app with media and the rest of the community.

10 Comments:

Blogger PointOfLight said...

As a reviewer, I appreciate you sharing this information not so much because I care about what it does to the rankings, but because I wondered if gifting might be seen as a viable way to provide copies of software to more reviewers. I do find the comment about perceived value of free software interesting, however. I seem to read that sentiment a lot lately, and I don't understand it. If anything, I would tend to value free software more when it comes to ratings, because I would think "I didn't have to pay for it, so maybe I should go easy on them", as opposed to "I can't believe I wasted $x.xx for that". I'm not saying that I actually do that, or at least I try very hard not to, but I don't get the logic of looking at it the other way. That's not to say that people don't flip that logic around, but I just don't understand it. Either way, thanks for sharing this information. It's always nice to know how various promotions work for small developers.

March 29, 2010 1:20 PM  
Anonymous Nick Laiacona said...

Thanks for this info, Natalia. This seems like a great way to track the effectiveness of ad campaigns. Good to know that it doesn't effect rank.

March 29, 2010 1:48 PM  
Blogger Alex Koloskov said...

Thanks for sharing your experience, we thought about doing similar promotion too, but now I am not sure that it's worth it.

March 29, 2010 1:52 PM  
Blogger Andrew said...

Great info, thanks for sharing. I was really curious as to how you were going to send 1000 gifts, and was actually going to email you and ask... I thought you must have some trick or script to do it, didn't think that you'd for sure do it manually. Good luck that they didn't limit the address field to 200 characters instead of 1000 !

March 29, 2010 1:54 PM  
Blogger natalia said...

@PointOfLight Yeah, it's a strange but well-documented psychological phenomenon. I think of it as easy come, easy go. If you had to spend no effort or money to get an app, you don't feel bad throwing it away without spending any effort trying to figure it out. And with rate on delete, it's very easy to rate something 1* when deleting it.

@Andrew The copy paste part really only took a few seconds per batch. Not sure if it's possible to automate the process, but given that I think I've now seen every possible error message from iTunes, I think I would have been babysitting the script longer than it took to just brute force it.

March 29, 2010 2:13 PM  
Blogger natalia said...

@Alex I wouldn't say it's not worth it completely. I wouldn't do such a big giveaway again, but giving away <100 copies would be very quick and easy to do, and will still get some excitement from the players.

March 29, 2010 2:16 PM  
Blogger wiibart said...

People value a gift much more than a free app. While people tend to rate free apps much lower than paid apps because a free app has lower perceived value, the recipients of our gifts have been nothing but grateful...

March 29, 2010 6:30 PM  
Anonymous Luis de la Rosa said...

It is interesting that both Apple and Visa locked your accounts for periods of time. I wonder if there is some way to pre-emptively warn them that you are going to be doing activities that seem suspicious but are intended and planned by your company.

When my brother used to use AOL and was sending out mass mailings to a group he was a leader of, I had to contact them, explained that the situation and they put him onto a special list which allowed him to send a lot more emails than normal users.

Gifting definitely sounds like a better strategy than trying to collect UDIDs from reviewers and then creating Adhocs for them. I'm glad it worked out well!

March 29, 2010 7:08 PM  
Anonymous Sander said...

@PointOfLight: I think there's something else going on too. There is quite a psychological barrier between "free" and "nearly free". When I made my game free for a day (Sjoelen) I got a lot of 1-star reviews. The game is a simulation of an existing (shuffleboard-type) game, and the vast majority of the 1-star comments were that they simply didn't like the game itself (not about my iPhone rendition of it). With the paid version, people will at least be interested in the genre, or they wouldn't buy it.

I consider this the major drawback of the "free for a day" type promotions.

March 30, 2010 4:56 AM  
Blogger PointOfLight said...

@Sander and @natalia I can see where you guys are coming from. Also, I tend to forget that the average "reviewer" in iTunes doesn't necessarily have the same mentality as someone like myself who actually acquires games specifically for the purpose of reviewing them. I could see where a lot of people who wouldn't normally try a game will get it just because it's free, and then for some odd reason feel obligated to rate the game just because they are presented with a dialog to do so. The reality is that the whole iTunes rating system has to be taken with a large grain of salt (or maybe a whole shaker depending on your mood).

March 30, 2010 11:02 AM  

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