We gave our app away for free. What happened next will amaze you.
In June, we were contacted by Apple asking if we’d like to participate in a promotion. Generally, when Apple offers your app some attention, you leap at the opportunity. This was a little different though: Apple wanted to give our app away for free.
But hold on, Obscura is a paid app right? If we give our app away for free, how are we supposed to make any money?
Obscura is a paid app, it does also include a few In App Purchases (IAP). At the time, we offered two filter packs that provided more options when editing images. The hope was that enough people would buy filter packs, that it would make up for the loss of sales revenue.
Here are a few of the key points we talked about when we were making our decision:
1. Our expectation was to see several hundred thousand downloads. Without much else to go on, we decided to base our estimates on 500,000 downloads. Having /hundreds of thousands/ of new users is pretty cool, if also terrifying.
2. Roughly 1 in 15 people bought a filter pack. We couldn’t apply this number going forward though, because these people had already demonstrated a willingness to part with their money. That’s some major selection bias. The industry average for IAP conversions is much closer to 1% (games are a bit higher).
3. Our sales figures were fairly predictable, as we were reaching the long tail after the launch in May. We had a good idea how much sales income we’d see over the same period, and the number was close to what we expected from sales of IAPs with the promo.
5. Even if we take a little loss in revenue, there is tremendous marketing value in more people knowing about Obscura, and sharing photos online.
6. Our biggest concern was that we would cannibalise our entire market of potential customers, and there’d be no one left to buy the app.
Here’s how it went:
IAP sales were actually lower than expected. Over the first week, about 0.5% of people bought an IAP. Over the full course of the promotion that increased to 0.75% which is still a good bit less than we were expecting. Perhaps the demographics of people who take advantage of such offers are less willing to pay for extras, or perhaps we’re just not pushing the IAPs hard enough within the app.
However…
The one thing we did not account for at all in our estimations was that people would continue to buy Obscura. Not only that, but /more/ people would buy Obscura than we’d expected without the promotion. We’re still trying to wrap our heads around it, but we’re certainly not complaining. We were featured in a number of articles as a result of the promotion which definitely introduced us to new audiences, and the increase in downloads probably improved our visibility on the App Store.
The graph shows that the promo generated a spike in revenue that very closely resembles the launch curve. That spike and long tail is typical of any app launch or significant news coverage, and so we’ve been very lucky to essentially have the benefit of launching the app a second time. The key to a sustainable app is maintaining attention over time, and the promotion provided an amazing opportunity to increase our relevance.
Naturally this raises some questions about the future of Obscura and the business model going forward. We’re very happy with Obscura’s position as a paid app, and we believe there needs to be a market for premium software for the App Store to thrive. I think we’ll definitely be looking further into IAPs as a way for people to support us, regardless of whether they bought the app, or acquired it through the promo.
It’s been a thrill to welcome so many new people from all around the world to Obscura, and we can’t wait to see what amazing things you create.
Ben & Adam
Addendum
A number of people have asked if Apple compensates developers for the giveaway, and to be very clear, no. Apple simply generates a bunch of promo codes on your behalf and makes them available in the Apple Store app. Obscura is far from the first app to be featured in this way, but it’s not the most well-known promotion.
It’s very hard to communicate to people that Apple’s Apple Store app is not the same as Apple’s App Store app. We quickly lost count of the amount of times we had to point people in the right direction.
There was much more demand for localisation than we anticipated, to the extent that we were seeing a negative impact on our App Store ratings. After an initial update to fix some of the urgent bugs, we put many of our plans for adding new features (especially related to iOS 12) on the back burner in order to localise the app to our most in-demand languages.
As ever, Obscura can be found on the App Store here, and is now available in German, Spanish, French, Japanese, and both Simplified and Traditional Chinese!
