quick point of view on iphone app ROI strategy.

1. POINT OF view
What Makes a Successful
iPhone App?
By Rob Gonda, director of digital strategy, Sapient Nitro.
As we begin 2010, there are more than 100,000 iPhone apps available for download — a dizzying array
of choices, with hundreds added each day. There are plenty of gems out there that have truly changed
the way we work and play. But there are plenty applications that will simply disappear over time due
to poor design or lack of utilitarian value. As marketers grapple with the question, “to build or not
to build,” let’s take a step back and evaluate what it takes to make a successful iPhone application
-- one that will drive brand and revenue -- by using a simple framework for determining your iPhone
application strategy.
What does it take to make a successful iPhone application?
Before answering the question, we have to define what makes an application successful. SapientNitro
always asks why are we building something, what are we trying to achieve, and how are we going to
measure it? Starting from top down, what are the business objectives, the key performance indicators,
and the associated metrics? iPhone applications usually serve one of two purposes: to drive brand or
to drive revenue.
Objective: Drive brand
Applications that drive brand most likely are free since they have to target a broad reach. The objective
is usually to increase awareness, brand recall, or word of mouth, and is traditionally measured
based on simple downloads, usage, and extended with how many share with friends, stickiness, and
engagement levels. A good way to take it one step further is to tie in social media monitoring and
analyze share and velocity of voice, general sentiment, and overall impact of the application within
social conversations.
Now that we understand how to measure it, what will the application do? Nowadays, brands cannot
push messages out to consumers, they have to provide real value and we generally call it brand as
an enabler. Applications that drive brand usually fall under one of two categories: entertainment
or usefulness. Entertaining applications usually have a wider adoption, more downloads, but less
engagement as users open it just a few times before their attention is diverted elsewhere. Useful
applications have a smaller reach but higher engagement; fewer users will download the application,
but they will use it much more than simple entertainment applications. However, the key for both types
is simplicity.
© Sapient Corporation, 02.2010

2. POINT OF view
Objective: Drive Revenue
Revenue can be driven directly by the application, or indirectly by multi-channel integration with retail
and stores. Direct revenue is generated by the application. Indirect revenue usually aims to drive users
to storefronts, partners, or otherwise provides reasons for the user to purchase products or services.
Measurement towards these objectives is always dollars.
Direct revenue can be generated from advertising or downloads, and both have different strategies.
Revenue from advertising is similar to brand-driven applications: the approach aims to reach as many
users as possible by providing free entertainment or utilities, and to collect revenue through third party
advertising. However, download revenue can be more complex as it involves pricing strategy.
The secret to maximize download revenue is pricing. The most popular paid applications are priced
between $0.99 and $3.99, with predominant 99-cents applications. These applications are what we call
the “big-fast sales.” Most users download them and use them once or twice; they’re predominantly
entertainment and provide small value to the consumer, but the mass download provides great initial
revenue and then stops. The most grossing applications are actually priced between $4.99 and $9.99
at 44% and account for 44% of revenue. These applications are downloaded less frequently, but used
more often as they usually provide tangible value.
Here’s a simple framework to determine your iPhone application strategy:
Set objectives – what is success?
Drive Brand - Free Generate Revenue
Entertaining Direct Revenue Indirect Revenue
Useful Business models Revenue Models Cross / multi-channel
• Free apps • Via ads Point-of-sale
• “Big-fast sales” • Via downloads
• Sustained sales
Pricing Structure
• Most popular $0.99 at 50% and 0.99-3.99
• Most grossing $4.99-9.99 at 44%
Conclusion
So what does it take to make a successful iPhone application? You need a strategy, know what you
want, how to get there, and how to measure. Keep it simple, make it engaging, and provide a means to
share and pass-along.
As a director of digital strategy at SapientNitro, Gonda is an interactive
technology guru, who provides the knowledge and experience required to
run high-level, multi-channel interactive campaigns that reach millions of
consumers.
Gonda has more than 15 years of experience in web development and
360-marketing campaigns for clients such as Adobe, Guinness, Toyota, Taco
Bell, NBC and others. His areas of specialty include emerging technologies,
marketing strategy, social media, rich Internet applications, service-oriented
architecture, mobile, agile methodology, automation, behavioral targeting
and multi-channel synergy. Before joining the leadership team at Sapient,
Gonda was co-founder and chief technical officer at iChameleon/group. He
is a frequent figure on the speaker circuit, having presented at conferences
such as Adobe Max, OMMA Mobile, and SXSW.
This article was originally published in Freelance Review, December 13, 2009.
© Sapient Corporation, 02.2010