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.

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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.