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Upgrades from Lite Version are #1 Driver of iPhone App Purchases

By deans ~ August 28th, 2009. Filed under: App Marketing, Resources.

In the brave new world of app marketing, we have very little real data regarding how people actually make buying decisions.  Of course, we all have theories and intuition, but it’s still mostly a black art.  While I’m not saying that they’ve completely illuminated the landscape, AdMob‘s recent July Metrics report at least gives us some information.  The report can be downloaded here (PDF).  The unsummarized data is also available (PDF).  I recognize that some in the community don’t appreciate AdMob’s methodology, but it’s hard to resist a tasty morsel when we’re so starved for insight.

AdMob chose to highlight the following results:

  • Android and iPhone users download approximately 10 new apps a month, while iPod touch owners download an average of 18 per month
  • More than 90 percent of Android and iPhone OS users browse and search for apps directly on their mobile device instead of their computer
  • Upgrading from the lite version was the top reason given when users were asked what drives them to purchase a paid app
  • iPhone and iPod touch users are twice as likely to purchase paid apps than Android users
  • Users who regularly download paid apps spend approximately $9 on an average of five paid downloads per month

As the proud user of an iPod touch, I was thrilled to see that my fellow touch users are, by far, the most prolific downloaders:
AdMob: Chart of Avg Downloads per User per Month
There are a couple of interesting things about this chart.  First, it should probably be titled, “Avg. Downloads per User per Month,” but that’s nitpicking.  The other thing that caught my attention is that, while iPod touch users are nearly twice as productive (or perhaps counter-productive, depending on whether you’re their employer) as iPhone users in terms of downloading apps, they are much less likely to pay for their apps.  Nearly 25% of the iPhone apps are paid, while just over 10% of the apps on touches are paid.  This is another reminder that the user communities are not at all homogeneous across the two devices.

For this post, I’m going to focus on the iPhone / iPod touch.  Although the report also covers Android, at this point, I’m more interested in the results for our target platforms.

In going through the report, I noticed a couple of other bits that are likely to influence how I conduct campaigns for BluMtnWerx.  For example, the top three ways that users discover apps are, in order:

  • Browsing through top App Store rankings
  • Searching for a specific type of app
  • Word of mouth (recommendations from friends or colleagues)

They also asked people who downloaded at least one paid app / month, “What Usually drives you to purchase a paid app?”  I guess that I shouldn’t be surprised, given some of the experiments that developers have conducted, but the top reason was (emphasis mine):

I like the free version and upgraded

I sure wish that Apple would approve iPuckLite!  It’s been waiting for nearly a month, now.

By contrast, the bottom two were:

  • News articles or blogs
  • A brand I know reaches out to me and introduces an app

Clearly, this reinforces the notion that getting high rankings in the App Store is the ticket to success.  It might also suggest that the effort put into blogging & self-promotion may have less impact (so why am I writing this?).  When I think about the results, though, I wonder whether the grassroots blogging and outreach are actually necessary prerequisites for getting good rankings on the App Store.

One place where the sample bias in AdMob’s methodology really comes through is the #4 item on their list:

“Seeing ads while using other apps”

The report contains some extremely interesting data on daily usage of apps.  Apparently iPhone users spend, on (weighted) average 84 minutes/day using apps, while iPod touch addicts are tapping away for 121 minutes/day.  The most fascinating thing in that data set, though, was the report that 21% of iPod touch users spend More Than Four Hours each day stabbing at their screens!  I don’t know whether to feel happy, or sad, if that’s true.

Finally, AdMob did some back of the envelope calculations to conclude that the App store paid market is currently (August 2009) about $200M per month.  Stunning.

Even if you don’t like AdMob, you really should spend a few minutes evaluating the information in this report and considering how it might impact your business.


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