Under the Radar

00:00:00 ◼   ► welcome to under the radar a show about

00:00:02 ◼   ► independent iOS app development I'm

00:00:04 ◼   ► Marco Arment and I'm David Smith under

00:00:07 ◼   ► the radar is never longer than 30

00:00:08 ◼   ► minutes so let's get started

00:00:09 ◼   ► so last week Apple launched App Store

00:00:12 ◼   ► search ads finally after we first heard

00:00:14 ◼   ► about them in June now they are launched

00:00:16 ◼   ► they're running and you can buy them and

00:00:18 ◼   ► we have and we like to share our

00:00:20 ◼   ► experience with that and I think we've

00:00:22 ◼   ► had I've had a lot of questions from

00:00:23 ◼   ► developers about just what some of the

00:00:25 ◼   ► terms mean with what you're buying

00:00:27 ◼   ► they're reporting that you get from the

00:00:29 ◼   ► App Store search ad system so I thought

00:00:31 ◼   ► first we go over a quick introduction to

00:00:33 ◼   ► the basic terminology of buying and

00:00:36 ◼   ► selling ads on the Internet

00:00:38 ◼   ► and this will lead into specifics about

00:00:40 ◼   ► the App Store search ads so first you

00:00:43 ◼   ► know I wanted to first go over some very

00:00:45 ◼   ► basic stuff so what is you know things

00:00:47 ◼   ► like impressions taps conversions so

00:00:50 ◼   ► very very basically here I'll try to go

00:00:51 ◼   ► through this relatively quickly an

00:00:53 ◼   ► impression is just how often an ad is

00:00:54 ◼   ► shown it's one showing of an ad to one

00:00:57 ◼   ► person click or tap that's obvious and

00:01:00 ◼   ► then a conversion is when somebody who

00:01:03 ◼   ► has clicked on or tapped on that ad then

00:01:06 ◼   ► does what the advertiser wanted so

00:01:08 ◼   ► usually it's buying something in a store

00:01:09 ◼   ► or it's like creating signing up for a

00:01:11 ◼   ► new account on a site or a service or in

00:01:14 ◼   ► the case of search ads for apps

00:01:15 ◼   ► installing the app so that is the

00:01:17 ◼   ► conversion is you know and ads are

00:01:19 ◼   ► priced in different ways one of the most

00:01:22 ◼   ► common kind of the baseline is CPM which

00:01:24 ◼   ► stands for cost per Mille a which is the

00:01:27 ◼   ► French word for a thousand which I'm

00:01:28 ◼   ► probably mispronouncing it basically

00:01:30 ◼   ► cost per thousand impressions so caught

00:01:33 ◼   ► how much you pay per thousand people who

00:01:35 ◼   ► see the ad the CPM model strongly favors

00:01:39 ◼   ► publishers generally in like where it

00:01:42 ◼   ► places the risk if I'm showing the ad

00:01:44 ◼   ► and somebody sees it but they decide not

00:01:46 ◼   ► to click on it or they decide not to go

00:01:48 ◼   ► through and buy it who bears that cost

00:01:50 ◼   ► of somebody seeing the app but just the

00:01:52 ◼   ► ad not working with CPM the publisher

00:01:55 ◼   ► gets paid regardless of whether the ad

00:01:56 ◼   ► has has you know worked it does however

00:01:59 ◼   ► have some weird incentives it

00:02:01 ◼   ► incentivize the publishers to put as

00:02:02 ◼   ► many ads on screen at spot as possible

00:02:05 ◼   ► that's why you have pages that are

00:02:06 ◼   ► absolutely full of ads there's also kind

00:02:08 ◼   ► of no guarantee that that people are

00:02:10 ◼   ► actually really seeing it like it's

00:02:12 ◼   ► showing some way

00:02:13 ◼   ► err and there's kind of no relation

00:02:15 ◼   ► between what the advertiser is paying

00:02:18 ◼   ► and how interested the viewers are in

00:02:21 ◼   ► the ad or whether they even saw it so of

00:02:23 ◼   ► course this also creates high fraud

00:02:24 ◼   ► potential you can kind of set up like

00:02:26 ◼   ► big farms and and things to generate

00:02:29 ◼   ► fake impressions or impressions that are

00:02:31 ◼   ► just from BOTS or from things that will

00:02:32 ◼   ► never lead to anything so then there's

00:02:34 ◼   ► kind of this middle ground cost per

00:02:35 ◼   ► click or tap CPC advertising is kind of

00:02:38 ◼   ► in the middle it kind of splits the risk

00:02:41 ◼   ► between publishers and advertisers you

00:02:43 ◼   ► know the publisher is paid when they

00:02:46 ◼   ► deliver interest to the ad their payment

00:02:48 ◼   ► somebody clicks on the ad but then it's

00:02:50 ◼   ► kind of up to the advertiser to turn

00:02:52 ◼   ► that click into a sale if they if they

00:02:55 ◼   ► can with this there is still fraud

00:02:57 ◼   ► potential that's that's fairly fairly

00:02:59 ◼   ► significant you know it kind of

00:03:01 ◼   ► incentivizes publishers to place ads or

00:03:04 ◼   ► they're gonna be accidentally clicked

00:03:06 ◼   ► there's not a very high cost to generate

00:03:09 ◼   ► fake clicks through BOTS and farms and

00:03:11 ◼   ► stuff and then the third kind of ad

00:03:13 ◼   ► payment is CPA this is cost per action

00:03:16 ◼   ► or acquisition and that's kind of

00:03:18 ◼   ► translated as cost per sale basically or

00:03:20 ◼   ► cost per conversion this strongly favors

00:03:23 ◼   ► the advertiser in the relationship this

00:03:25 ◼   ► kind of places all the risk of whether

00:03:27 ◼   ► the ad will work or not on the

00:03:28 ◼   ► publishers you know the publishers are

00:03:30 ◼   ► not gonna get paid unless somebody

00:03:32 ◼   ► actually not only clicks on the ad but

00:03:34 ◼   ► goes and downloads the app or creates an

00:03:36 ◼   ► account or makes a sale there is very

00:03:39 ◼   ► low potential for publisher fraud here I

00:03:41 ◼   ► mean you could theoretically like and

00:03:43 ◼   ► I'm sure people do create farms and

00:03:45 ◼   ► people to go buy things for stolen

00:03:47 ◼   ► credit cards or to go install apps on

00:03:49 ◼   ► fake accounts aren't fake devices but

00:03:52 ◼   ► this is a lot more involved than just

00:03:54 ◼   ► like you know basic click fraud or

00:03:55 ◼   ► impression fraud if you are if you are

00:03:57 ◼   ► buying the ad as an advertiser you

00:03:59 ◼   ► generally want this last method CPA

00:04:01 ◼   ► because you're only paying if somebody

00:04:03 ◼   ► actually buys your app or creates an

00:04:06 ◼   ► account under site or whatever else and

00:04:07 ◼   ► commit you know makes a sale on your

00:04:08 ◼   ► site that's ideal for you as the

00:04:10 ◼   ► advertiser because first of all it'll be

00:04:12 ◼   ► easier to figure out what to pay because

00:04:14 ◼   ► you'll know what you'll make and also

00:04:15 ◼   ► just kind of you don't really take any

00:04:17 ◼   ► risk there you know the risk of a

00:04:18 ◼   ► thousand people clicking on your ad and

00:04:20 ◼   ► then none of them buy anything you're

00:04:22 ◼   ► not bearing that risk because you're not

00:04:23 ◼   ► paying for people who don't buy anything

00:04:24 ◼   ► right so

00:04:25 ◼   ► as a buyer of ads you want CPA as a

00:04:28 ◼   ► seller of ads whether you're running a

00:04:30 ◼   ► website or running a store front that

00:04:32 ◼   ► has search ads in it or if you're

00:04:34 ◼   ► running a podcast pockets worked this

00:04:35 ◼   ► way too as a seller of ads you want CPM

00:04:38 ◼   ► because you want to be like well I

00:04:40 ◼   ► delivered a bunch of people who who were

00:04:42 ◼   ► exposed to your ad the rest is up to you

00:04:44 ◼   ► so CPC the cost per click or tap is kind

00:04:49 ◼   ► of the compromise nobody really loves it

00:04:50 ◼   ► there are still problems with it but it

00:04:52 ◼   ► is probably the most pragmatic

00:04:53 ◼   ► compromise between them in most cases

00:04:55 ◼   ► and then there are just a few little

00:04:57 ◼   ► terms you might see around that are

00:04:58 ◼   ► useful to know here eCPM which stands

00:05:01 ◼   ► for effective CPM is when you are paying

00:05:04 ◼   ► per click or per action you you

00:05:07 ◼   ► basically just divide it out by the

00:05:09 ◼   ► number of impressions so it tells you

00:05:11 ◼   ► roughly what you are earning per

00:05:13 ◼   ► thousand page views or impressions or

00:05:15 ◼   ► whatever or what you're paying per

00:05:17 ◼   ► thousand pages impressions even if

00:05:18 ◼   ► you're not paying per impression

00:05:20 ◼   ► technically you'll see on apples reports

00:05:22 ◼   ► for this you'll see terms like CTR or

00:05:24 ◼   ► TTR this is a click-through rate or tap

00:05:27 ◼   ► through rate

00:05:28 ◼   ► TTR is one of the last columns in the

00:05:30 ◼   ► search ads you will see it if you do

00:05:31 ◼   ► this that stands for tap through rate

00:05:33 ◼   ► which is the percentage of impressions

00:05:35 ◼   ► of the ad that result in taps on the ad

00:05:38 ◼   ► and then see are at the very end of

00:05:40 ◼   ► Apple's report see R stands for a

00:05:42 ◼   ► conversion rate so this is the

00:05:43 ◼   ► percentage of clicks on the ad that

00:05:46 ◼   ► result in installations of the app or

00:05:49 ◼   ► sales or whatever else that's it for the

00:05:51 ◼   ► basic give anything to add for that no I

00:05:53 ◼   ► mean I think the important thing I

00:05:55 ◼   ► though to keep in mind with all of this

00:05:56 ◼   ► stuff is that like this type of

00:05:59 ◼   ► advertising is usually it's this like

00:06:02 ◼   ► this is basically a numbers game where

00:06:04 ◼   ► you the purpose of the advertising is to

00:06:07 ◼   ► drive people to do something that the

00:06:09 ◼   ► advertiser wants and the way you do that

00:06:12 ◼   ► is you know you have these didn't they

00:06:14 ◼   ► call it a funnel is the fancy term for

00:06:17 ◼   ► it so if you ever see that's like a

00:06:18 ◼   ► sales funnel or something that's where

00:06:19 ◼   ► it's coming from but it's it starts off

00:06:21 ◼   ► where you cast this very wide net which

00:06:23 ◼   ► is where you start to get into the

00:06:24 ◼   ► impressions a sight of thing it's like

00:06:26 ◼   ► you just say you throw something out to

00:06:28 ◼   ► thousands of people and then a certain

00:06:30 ◼   ► subset of those will pay attention to

00:06:33 ◼   ► that and a smaller subset of that of

00:06:35 ◼   ► them will take some action as a result

00:06:37 ◼   ► of that

00:06:38 ◼   ► and then perhaps an even smaller set

00:06:39 ◼   ► will actually do the the final thing

00:06:42 ◼   ► whatever that is that's download the app

00:06:44 ◼   ► in this case and so all of the terms and

00:06:46 ◼   ► things are all about trying to

00:06:47 ◼   ► understand that that process and in many

00:06:51 ◼   ► ways it's just a numbers game at a

00:06:55 ◼   ► certain point that obviously each person

00:06:57 ◼   ► who's deciding whether or not to click

00:07:00 ◼   ► on an ad is making a choice and

00:07:01 ◼   ► obviously but from a you know the

00:07:04 ◼   ► holistic perspective there are far too

00:07:05 ◼   ► many people making far too many choices

00:07:07 ◼   ► for that to be something you could

00:07:08 ◼   ► really think about and that's why you

00:07:09 ◼   ► tend to roll it all up into these you

00:07:12 ◼   ► know you don't think about a impression

00:07:13 ◼   ► you think about thousands of impressions

00:07:15 ◼   ► gives you a sense of the kind of scale

00:07:17 ◼   ► that this process tends to work in and

00:07:19 ◼   ► that's why I'm gonna get advertising is

00:07:21 ◼   ► so numbers based is just you know it's

00:07:24 ◼   ► not really it's not that same thing of a

00:07:26 ◼   ► sales thing where you're making a cook

00:07:28 ◼   ► you know making a cold call to a person

00:07:30 ◼   ► in trying to have a direct interaction

00:07:31 ◼   ► you are just blasting out ads to all

00:07:35 ◼   ► kinds of different people in the hopes

00:07:36 ◼   ► that a small and a small subset of those

00:07:39 ◼   ► people will find what you're doing

00:07:40 ◼   ► interesting and that's why that's it's

00:07:42 ◼   ► so data-driven and it's just I can tell

00:07:44 ◼   ► like that's most of advertising is this

00:07:46 ◼   ► this kind of dialing things around to

00:07:48 ◼   ► try and hit the point where you're

00:07:51 ◼   ► making money but not losing money or

00:07:53 ◼   ► getting the you know if you have a

00:07:55 ◼   ► target for the number of acquisitions

00:07:56 ◼   ► you have you can work out well how many

00:07:58 ◼   ► impressions do I need to generate that

00:08:00 ◼   ► amount of interest and it's all kind of

00:08:01 ◼   ► just you know damn multiplying and

00:08:03 ◼   ► dividing with these kind of numbers all

00:08:05 ◼   ► right so moving on to specifics about

00:08:08 ◼   ► the Apple search ads first of all it's

00:08:11 ◼   ► important to understand how the pricing

00:08:12 ◼   ► works this is it's priced in a way

00:08:15 ◼   ► that's known as a Vickrey auction or a

00:08:17 ◼   ► second-price auction this is exactly the

00:08:19 ◼   ► same way that Google AdWords works as

00:08:21 ◼   ► far as I know or at least you know in

00:08:23 ◼   ► the ballpark and it's also if you ever

00:08:26 ◼   ► bought anything on eBay it is very

00:08:27 ◼   ► similar to how standard eBay auctions

00:08:29 ◼   ► work basically the highest bidder for a

00:08:32 ◼   ► certain keyword or whatever the highest

00:08:33 ◼   ► bidder for that keyword wins and gets

00:08:36 ◼   ► their ad shown and pays but they only

00:08:38 ◼   ► pay the amount of the second highest

00:08:41 ◼   ► bidder on that ad so you basically bid

00:08:44 ◼   ► what's the most you're willing to pay

00:08:46 ◼   ► for this keyword and so if you bid $0.50

00:08:49 ◼   ► and someone else bid 25 cents you

00:08:51 ◼   ► we'll win the auction but you'll only

00:08:53 ◼   ► pay 25 cents or some incremental thing

00:08:55 ◼   ► over the 26 cents or you know whatever

00:08:56 ◼   ► it is this actually is very favorable to

00:08:59 ◼   ► the to the buyer to the advertiser

00:09:01 ◼   ► because you only pay just enough to win

00:09:05 ◼   ► the auction but no more than that so

00:09:07 ◼   ► anything else that's between that and

00:09:09 ◼   ► your bid you guys get to keep that money

00:09:10 ◼   ► that that's your surplus there are some

00:09:12 ◼   ► big limitations in the Apple search ads

00:09:15 ◼   ► that other advertiser systems don't

00:09:18 ◼   ► necessarily have or don't usually have

00:09:19 ◼   ► one of the biggest ones is that you

00:09:22 ◼   ► don't have a lot of control over the

00:09:24 ◼   ► look and content of the ad itself the ad

00:09:28 ◼   ► is kind of these fixed format things

00:09:30 ◼   ► that Apple has it has your apps title it

00:09:33 ◼   ► has your app store description does it

00:09:35 ◼   ► does it have star ratings I think it

00:09:37 ◼   ► does right in the example when it does

00:09:39 ◼   ► on the in the search portal it shows the

00:09:43 ◼   ► rating but I've seen some in the app

00:09:45 ◼   ► store that don't and some that do so I

00:09:47 ◼   ► don't know if it includes it or if it

00:09:49 ◼   ► only includes it and if it has a certain

00:09:50 ◼   ► number of ratings or if there's

00:09:52 ◼   ► something more going on there but it may

00:09:54 ◼   ► or may not include your star rating

00:09:56 ◼   ► right so it's basically it basically is

00:09:59 ◼   ► like a tiny version of your app store

00:10:01 ◼   ► entry of your search entry so title like

00:10:04 ◼   ► the first line of the description

00:10:06 ◼   ► sometimes screenshots sometimes star

00:10:09 ◼   ► ratings and one of the problems with

00:10:11 ◼   ► this is that you as the as the

00:10:13 ◼   ► advertiser you don't really have a good

00:10:15 ◼   ► way to a/b test anything so like if you

00:10:17 ◼   ► want if you want a B test two different

00:10:20 ◼   ► description lines there and see like

00:10:22 ◼   ► which one generates more tap throughs or

00:10:24 ◼   ► more clicks or more sales the only way

00:10:26 ◼   ► you can really do that is to change your

00:10:28 ◼   ► description every so often but then like

00:10:30 ◼   ► you can't test those at the same time

00:10:32 ◼   ► with the same impression so it's it's a

00:10:34 ◼   ► little it's a less scientific test it

00:10:35 ◼   ► makes it harder to to know what is an

00:10:38 ◼   ► effective description or whatever

00:10:40 ◼   ► fective screenshots to show there or

00:10:41 ◼   ► whatever else you know again you can

00:10:43 ◼   ► test them just by changing them but then

00:10:44 ◼   ► that changes them everywhere and you can

00:10:46 ◼   ► only do that within a certain you know

00:10:48 ◼   ► time granularity so it's not a great

00:10:51 ◼   ► test yeah and I think it's also probably

00:10:53 ◼   ► good point to point out there that what

00:10:54 ◼   ► you're doing the what you're showing is

00:10:56 ◼   ► the same thing that you'll show on your

00:10:58 ◼   ► app store page

00:10:59 ◼   ► and so you could potentially imagine

00:11:02 ◼   ► wanting your ads to be geared towards a

00:11:06 ◼   ► particular demographic or type of

00:11:08 ◼   ► customer that is more specific than your

00:11:12 ◼   ► generalized app store page which is

00:11:16 ◼   ► something that we can't do and you know

00:11:18 ◼   ► so you could imagine you're having a can

00:11:19 ◼   ► add that you were running on a website

00:11:21 ◼   ► that's geared towards a very a fan of a

00:11:23 ◼   ► very particular thing or a particular

00:11:25 ◼   ► style you're just try different colors

00:11:28 ◼   ► see what people like but it whereas what

00:11:30 ◼   ► we have here is just whatever you kind

00:11:33 ◼   ► of have that you're doing for your

00:11:34 ◼   ► general purpose app store description is

00:11:36 ◼   ► the same thing that will be shown here

00:11:37 ◼   ► and so that's you know it's nice and

00:11:41 ◼   ► that it's less there's less work for us

00:11:43 ◼   ► to do I suppose yeah that actually is

00:11:44 ◼   ► really nice like I didn't have to come

00:11:46 ◼   ► up with a creative for this I think this

00:11:48 ◼   ► is a fancy if you ever are in marketing

00:11:50 ◼   ► and they call it like get me your

00:11:52 ◼   ► creative the creative ideas like the the

00:11:55 ◼   ► picture or the text or whatever it is

00:11:57 ◼   ► that you want to put in the ad but yeah

00:11:59 ◼   ► we have nothing to do with that it

00:12:00 ◼   ► should be no in many ways Apple is

00:12:01 ◼   ► making it appear it looks just like a

00:12:04 ◼   ► regular search result and so just

00:12:06 ◼   ► whatever you put in there is what's

00:12:07 ◼   ► going to show up and so your app you you

00:12:09 ◼   ► have to make sure that you're appealing

00:12:10 ◼   ► you know it's appealing both as a search

00:12:13 ◼   ► ad as well as appealing as a search page

00:12:18 ◼   ► that dholtze me that they're gonna go to

00:12:19 ◼   ► and look at in the app store which is

00:12:21 ◼   ► probably good practice anyway sure are

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00:13:49 ◼   ► rate going past the monthly break is

00:13:51 ◼   ► once you reach the monthly rate just

00:13:52 ◼   ► caps it there and you just pay whatever

00:13:53 ◼   ► the monthly rate is this is on all plans

00:13:56 ◼   ► and all add-on services including their

00:13:58 ◼   ► wonderful backups and their node

00:13:59 ◼   ► balancers which is like their fancy add

00:14:01 ◼   ► load balancer that I use and I love it

00:14:02 ◼   ► quite a bit anyway as it listener to

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00:14:27 ◼   ► all right so now that we've discussed

00:14:29 ◼   ► kind of you know ad basics and a few

00:14:32 ◼   ► things that make the app store ads a

00:14:34 ◼   ► little bit different let's talk about

00:14:35 ◼   ► the actual process of buying app store

00:14:37 ◼   ► ads for your app the first obvious

00:14:40 ◼   ► question here is how do you know what

00:14:43 ◼   ► you can pay per tap so so app store ads

00:14:46 ◼   ► are billed per tap as I mentioned

00:14:47 ◼   ► earlier they're different different

00:14:48 ◼   ► methods how much you can pay per tap of

00:14:52 ◼   ► course depends on a lot of things

00:14:53 ◼   ► what is your app cost or how do you make

00:14:55 ◼   ► money what is the average amount of

00:14:57 ◼   ► money that you make per new user and and

00:15:01 ◼   ► of course then like you know how how do

00:15:03 ◼   ► you translate between the number of taps

00:15:06 ◼   ► on your app store page or your ad and

00:15:08 ◼   ► how many people will actually install

00:15:11 ◼   ► the app and make you money so this is

00:15:14 ◼   ► obviously easiest for paid apps paid

00:15:16 ◼   ► upfront apps where you know that every

00:15:19 ◼   ► installation of the app will get you X

00:15:21 ◼   ► amount of money don't forget apples

00:15:23 ◼   ► Commission okay you know look at that

00:15:25 ◼   ► look at you X amount of money

00:15:27 ◼   ► and then you just have to figure out how

00:15:29 ◼   ► many views on my App Store page does it

00:15:31 ◼   ► usually take to make one sale and this

00:15:34 ◼   ► is very easy to find in iTunes Connect

00:15:36 ◼   ► analytics there's there's a bunch of

00:15:38 ◼   ► ways to do this and people have found

00:15:40 ◼   ► out in the various graphs and stuffs

00:15:42 ◼   ► will be linked to that in the show notes

00:15:42 ◼   ► was a good blog post about it basically

00:15:45 ◼   ► paid apps is fairly easy if your app is

00:15:48 ◼   ► not paid upfront you have to figure out

00:15:49 ◼   ► basically what is the average amount of

00:15:51 ◼   ► money you stand to make from somebody

00:15:53 ◼   ► who installs your app and that is not

00:15:56 ◼   ► necessarily straightforward depending on

00:15:57 ◼   ► how you make your money

00:15:59 ◼   ► it is certainly doable and you probably

00:16:01 ◼   ► have better bracer than I do don't you

00:16:02 ◼   ► sure I mean this is probably one of the

00:16:04 ◼   ► harder things that I've been trying to

00:16:06 ◼   ► work through recently is the under is

00:16:07 ◼   ► especially for a lot of my apps that

00:16:10 ◼   ► make their make their money from

00:16:11 ◼   ► advertising in so it's it's this big

00:16:14 ◼   ► video this big fantastic circle of

00:16:16 ◼   ► advertising is enterprising to get it to

00:16:18 ◼   ► get someone to download the app to show

00:16:19 ◼   ► them ads to give me money so that I can

00:16:21 ◼   ► buy more ads and you know that the cycle

00:16:23 ◼   ► continues but for them it's much more

00:16:25 ◼   ► complicated because yes there's no

00:16:27 ◼   ► upfront one-time purchase it's you know

00:16:30 ◼   ► that person who you know I'm paying for

00:16:33 ◼   ► a tap a certain number of people who tap

00:16:35 ◼   ► will then install the app they will then

00:16:38 ◼   ► use the app at a particular for a

00:16:40 ◼   ► particular a number of you know I'm out

00:16:41 ◼   ► of time which is if you're looking at

00:16:44 ◼   ► your analytics you're looking for

00:16:45 ◼   ► something called retention which is

00:16:47 ◼   ► showing you you know roughly how what

00:16:50 ◼   ► percentage of users will continue to use

00:16:52 ◼   ► your app after a particular time you

00:16:54 ◼   ► know so if you had say a 30 percent

00:16:57 ◼   ► retention after 30 days that means 30

00:16:59 ◼   ► days after someone downloads it there's

00:17:00 ◼   ► a good chance that they are continuing

00:17:02 ◼   ► to use it so you can kind of get a sense

00:17:04 ◼   ► of how often they'll use it then you

00:17:06 ◼   ► have to work out how many sessions they

00:17:08 ◼   ► typically do per day of those sessions

00:17:11 ◼   ► how many impressions you're showing on

00:17:12 ◼   ► your ad network and then you work out

00:17:15 ◼   ► that from there how much revenue you get

00:17:16 ◼   ► per impression and so on and so you it's

00:17:19 ◼   ► much more inaccurate and you know I've

00:17:22 ◼   ► been trying as best I could over the

00:17:24 ◼   ► last you know a couple weeks as such as

00:17:27 ◼   ► became a thing to try and really get a

00:17:28 ◼   ► good number for my apps but at this

00:17:30 ◼   ► point I just kind of have a vague

00:17:32 ◼   ► estimate of like it costs I get maybe

00:17:34 ◼   ► this much per user and I'm just kind of

00:17:37 ◼   ► basing my advertising on that because I

00:17:39 ◼   ► think it's also probably worth pointing

00:17:40 ◼   ► out

00:17:41 ◼   ► well it's the most straightforward way

00:17:43 ◼   ► to price this is just in the sense of

00:17:44 ◼   ► you know if I pay a penny less then I

00:17:48 ◼   ► make from that user for the ad then I'm

00:17:52 ◼   ► making money but you could also just

00:17:55 ◼   ► view it as a marketing expense that

00:17:56 ◼   ► certain kinds of marketing you're just

00:17:58 ◼   ► trying to get people interested in your

00:18:00 ◼   ► application and exposed to it and kind

00:18:03 ◼   ► of it's more I guess what you'd call

00:18:04 ◼   ► brand advertising that you're I'm glad

00:18:07 ◼   ► we're you we can worry less about it and

00:18:09 ◼   ► you know and certainly some of my

00:18:11 ◼   ► experience early on that's kind of what

00:18:12 ◼   ► I'm doing I'm just kind of curious to

00:18:14 ◼   ► see how inexperienced what it costs to

00:18:16 ◼   ► get users and thinking in some ways that

00:18:19 ◼   ► you know having my app in more people's

00:18:22 ◼   ► hands will have a bigger impact down the

00:18:25 ◼   ► road then they're not and it may not

00:18:27 ◼   ► necessarily match up one-to-one in terms

00:18:29 ◼   ► of you know I paid 25 cents I made 26

00:18:33 ◼   ► cents so I'm good it may be that I'm

00:18:36 ◼   ► paying overpaying by you know 10 cents a

00:18:39 ◼   ► user which isn't sustainable necessarily

00:18:41 ◼   ► in a direct sense but it may be if that

00:18:44 ◼   ► those extra downloads are broadly make

00:18:47 ◼   ► you know helping your app you know from

00:18:50 ◼   ► an exposure perspective so it's Tiffany

00:18:52 ◼   ► it's really tricky thing to work through

00:18:54 ◼   ► but you know you just kind of have to

00:18:55 ◼   ► sit down in your analytics whether

00:18:57 ◼   ► that's you know something like fabric

00:18:59 ◼   ► that you're using which is what I use

00:19:00 ◼   ► and I think what you use is or iTunes

00:19:03 ◼   ► Connect analytics can do a lot of this

00:19:04 ◼   ► for you as well

00:19:05 ◼   ► and you just kind of have to sit in you

00:19:07 ◼   ► take the numbers put it into Excel and

00:19:09 ◼   ► you do some crunching to see what makes

00:19:11 ◼   ► sense for you yeah I mean you know thing

00:19:13 ◼   ► to think about is like how what

00:19:14 ◼   ► percentage of your new users come

00:19:16 ◼   ► through clicking adds because like you

00:19:18 ◼   ► know if you're thinking that like you

00:19:21 ◼   ► make 25 cents per user but you know 10

00:19:25 ◼   ► percent of your users come from clicking

00:19:27 ◼   ► ads and the rest come from other ways

00:19:28 ◼   ► then like you actually might be able to

00:19:30 ◼   ► bid a lot more than what that is to get

00:19:32 ◼   ► those users you know and again it

00:19:33 ◼   ► depends on like what are your priorities

00:19:35 ◼   ► are your priorities to get more users to

00:19:37 ◼   ► spread it wider and then you know to me

00:19:39 ◼   ► maybe reap the rewards of that down the

00:19:40 ◼   ► road with just a wider bigger user base

00:19:42 ◼   ► and word-of-mouth marketing like there

00:19:44 ◼   ► or you know or do you really need to

00:19:45 ◼   ► care about like absolutely minimizing

00:19:48 ◼   ► cost of acquiring these users to begin

00:19:49 ◼   ► with and there's every app will be

00:19:51 ◼   ► different in this way what you know your

00:19:52 ◼   ► needs your priorities these will all be

00:19:54 ◼   ► different

00:19:54 ◼   ► and it really depends a lot on your app

00:19:56 ◼   ► and how much you stand to make per user

00:19:58 ◼   ► really and this is actually one thing

00:20:00 ◼   ► that I think this is actually helpful in

00:20:02 ◼   ► this new environment because III think

00:20:04 ◼   ► this will make people think about their

00:20:06 ◼   ► business models a little bit more and

00:20:07 ◼   ► maybe charge more money and charge

00:20:09 ◼   ► higher prices for apps that really that

00:20:11 ◼   ► that that can earn it that deserved the

00:20:13 ◼   ► higher prices so I think this actually

00:20:15 ◼   ► might help raise App Store prices as

00:20:17 ◼   ► people figure out you know it would be

00:20:19 ◼   ► really a lot better if I could bid on

00:20:20 ◼   ► these keywords and be a little more

00:20:22 ◼   ► competitive on the ad side but in order

00:20:25 ◼   ► to do that I have to charge a real price

00:20:26 ◼   ► for my app or I have to have some kind

00:20:28 ◼   ► of recurring revenue scheme or something

00:20:29 ◼   ► like that so ultimately I think this

00:20:31 ◼   ► might actually help ad pricing

00:20:32 ◼   ► substantially yeah or at the very least

00:20:34 ◼   ► it'll help I think it's definitely been

00:20:36 ◼   ► a constructive exercise for myself to

00:20:38 ◼   ► have to try and put a dollar amount on

00:20:41 ◼   ► each user yeah which it for someone who

00:20:44 ◼   ► loves numbers as much as I do is

00:20:45 ◼   ► something that I've never really done

00:20:47 ◼   ► and so it's definitely been a

00:20:48 ◼   ► constructive thing - if forcing you to

00:20:51 ◼   ► think down sit down and actually be like

00:20:53 ◼   ► okay what is a customer worth to me and

00:20:57 ◼   ► to put that into a number because even

00:20:59 ◼   ► beyond advertising that's a very useful

00:21:01 ◼   ► and important thing I think to

00:21:03 ◼   ► understand because even when you're

00:21:04 ◼   ► thinking about things like customer

00:21:06 ◼   ► support or things like other support

00:21:10 ◼   ► expenses or server hosting or things

00:21:11 ◼   ► where you if you can put your a number

00:21:14 ◼   ► on what a user is worth monetarily to

00:21:17 ◼   ► you then you can probably make more

00:21:19 ◼   ► informed decisions about the other

00:21:20 ◼   ► things that are involved in that are

00:21:22 ◼   ► costs for running an app yeah all right

00:21:25 ◼   ► and then I figure we spent our last few

00:21:26 ◼   ► minutes talking about keywords you know

00:21:28 ◼   ► what keywords do you bid on how you know

00:21:30 ◼   ► what do you buy what what do you bid

00:21:32 ◼   ► against apples and apples implementation

00:21:34 ◼   ► here is a little bit restrictive in that

00:21:36 ◼   ► they even mentioned this during the

00:21:38 ◼   ► during the the introduction of this that

00:21:41 ◼   ► if Apple does not deem the keywords that

00:21:43 ◼   ► are being searched for relevant to your

00:21:46 ◼   ► app and that's relevant by whatever

00:21:48 ◼   ► internal standards they're using that's

00:21:50 ◼   ► kind of a black box to us but basically

00:21:52 ◼   ► if Apple does not deem keywords relevant

00:21:53 ◼   ► to your app your ad will not be shown

00:21:55 ◼   ► against those keywords no matter what

00:21:56 ◼   ► you're going to bid on it which is

00:21:58 ◼   ► interesting for example like one of the

00:22:01 ◼   ► things I decided a bid on an overcast

00:22:03 ◼   ► sad campaign was some terms related to

00:22:05 ◼   ► the word

00:22:06 ◼   ► I do because podcasts are kind of like

00:22:08 ◼   ► listening to the radio and so I want to

00:22:10 ◼   ► kind of get those people to and all of

00:22:13 ◼   ► those if you look at their horse those

00:22:14 ◼   ► all have zero impressions and so it

00:22:16 ◼   ► seems obvious that Apple does not deem

00:22:18 ◼   ► the word radio relevant to my app and so

00:22:22 ◼   ► even if I'm willing to pay that's I

00:22:24 ◼   ► can't get those key words and this you

00:22:27 ◼   ► know so this is this is actually this is

00:22:29 ◼   ► probably a good thing so what it means

00:22:30 ◼   ► is like I couldn't bid against something

00:22:33 ◼   ► like Twitter or Instagram for overcast

00:22:35 ◼   ► to try to you know cash in on big search

00:22:37 ◼   ► terms that aren't actually relevant to

00:22:38 ◼   ► my app at all but also that means that

00:22:40 ◼   ► all of us small indie developers we

00:22:42 ◼   ► can't all be outbid in every single

00:22:44 ◼   ► category by things like clash of clans

00:22:47 ◼   ► and like casinos like apps that make

00:22:48 ◼   ► tons of money per user to the point

00:22:50 ◼   ► where they're willing to spend whatever

00:22:51 ◼   ► whatever it takes to even get users who

00:22:53 ◼   ► are searching for podcast apps because

00:22:54 ◼   ► they don't care it's it's a user as a

00:22:56 ◼   ► user to them and they they make so much

00:22:57 ◼   ► money they can do that so this basically

00:22:59 ◼   ► makes that impossible and it kind of it

00:23:01 ◼   ► kind of gives people a more fair chance

00:23:03 ◼   ► of their ads being shown in categories

00:23:06 ◼   ► that are not that hotly contested for

00:23:08 ◼   ► things like you know high profit games

00:23:09 ◼   ► if you actually make a game well that

00:23:12 ◼   ► might be harder but I'm sorry about that

00:23:14 ◼   ► I don't any harder for you anyway though

00:23:16 ◼   ► that's actually true your upside is

00:23:21 ◼   ► generally higher but it's harder to get

00:23:23 ◼   ► it anyway there's also this big question

00:23:26 ◼   ► about whether to bid on your competitors

00:23:29 ◼   ► app names and and we've had some

00:23:31 ◼   ► discussions on Twitter here and there

00:23:32 ◼   ► about this but my my position on whether

00:23:35 ◼   ► I've been in competitors names is yes

00:23:38 ◼   ► you should do it and that's just part of

00:23:39 ◼   ► the game and your competitors are gonna

00:23:40 ◼   ► bet in your name too and that's just

00:23:42 ◼   ► part of the system and that in general

00:23:44 ◼   ► it not only should this be considered

00:23:46 ◼   ► like you know unnecessary side of this

00:23:48 ◼   ► but I wouldn't even call it like a

00:23:49 ◼   ► necessary evil I'd call just a feature

00:23:51 ◼   ► of his system because you know you're

00:23:53 ◼   ► thinking you know if you're offended by

00:23:55 ◼   ► the idea of competitors bidding on you

00:23:57 ◼   ► you're probably thinking of bigger

00:23:59 ◼   ► competitors bidding on your apps name

00:24:01 ◼   ► but if you think about it the other way

00:24:03 ◼   ► you can bid on bigger apps names and

00:24:06 ◼   ► that is more powerful because that you

00:24:08 ◼   ► think like you know like one of the

00:24:09 ◼   ► biggest podcast apps out there is

00:24:10 ◼   ► stitcher right and and I'm I bid on

00:24:13 ◼   ► stitchers name B and I've gotten click

00:24:14 ◼   ► throughs and installs based on that

00:24:15 ◼   ► because I even if somebody's not

00:24:18 ◼   ► searching for overcast

00:24:19 ◼   ► irrelevant it's it's a perfectly valid

00:24:21 ◼   ► alternative in my opinion it's a lot

00:24:23 ◼   ► better alternative obviously and so I

00:24:26 ◼   ► can get users that are searching for my

00:24:28 ◼   ► competitors apps who are bigger than me

00:24:30 ◼   ► and that is that is a very kind of

00:24:32 ◼   ► freeing opportunity that I have it like

00:24:34 ◼   ► that that's a grab from you take

00:24:35 ◼   ► advantage of so if you think about it in

00:24:37 ◼   ► that direction I think it makes a lot of

00:24:39 ◼   ► sense why they allow that and that's

00:24:41 ◼   ► that's just part of that like all

00:24:43 ◼   ► advertising kind of works that way

00:24:44 ◼   ► that's I think that's part of the game

00:24:45 ◼   ► and I think that's a fair game and if

00:24:47 ◼   ► you decide that you don't find that

00:24:50 ◼   ► ethical that's fine you don't have to do

00:24:52 ◼   ► it but but i think i think standard

00:24:55 ◼   ► practice is going to be almost

00:24:57 ◼   ► everyone's going to do that so if you

00:24:58 ◼   ► don't do it you're probably gonna miss

00:25:00 ◼   ► out on some some pretty good sales

00:25:04 ◼   ► opportunities there sure I mean it's

00:25:06 ◼   ► also probably worth saying that the way

00:25:08 ◼   ► Apple's system works and this is

00:25:10 ◼   ► actually to your point about relevancy

00:25:12 ◼   ► if you're curious what Apple thinks is

00:25:13 ◼   ► relevant to your application the easiest

00:25:16 ◼   ► way to do it once you have been running

00:25:17 ◼   ► a campaign for a little while is to just

00:25:19 ◼   ► go into there the you sort of if you tap

00:25:22 ◼   ► down a little bit into your campaign

00:25:23 ◼   ► you'll get the breakdown of where what

00:25:26 ◼   ► your impressions are by keyword and many

00:25:29 ◼   ► of those keywords won't be things that

00:25:30 ◼   ► you put in they'll just be terms that

00:25:33 ◼   ► Apple thinks are relevant and so at a

00:25:35 ◼   ► high level I like I'm in my mind if it's

00:25:38 ◼   ► on one of those if it's in that list

00:25:39 ◼   ► that Apple is doing they're automatic

00:25:43 ◼   ► matching with then that's probably

00:25:45 ◼   ► roughly the universe of what Apple

00:25:47 ◼   ► thinks is relevant to me so if you're

00:25:50 ◼   ► kind of curious with that relevancy is

00:25:52 ◼   ► and the reality is in that list with me

00:25:55 ◼   ► putting nothing into it I'm seeing the

00:25:57 ◼   ► names of my competitors apps because

00:25:59 ◼   ► Apple knows that they're very relevant

00:26:01 ◼   ► like the in many ways the most relevant

00:26:04 ◼   ► results are when someone is very

00:26:06 ◼   ► specifically looking for an application

00:26:08 ◼   ► that is very similar to yours and I

00:26:11 ◼   ► think like you said it's just that is

00:26:13 ◼   ► just the nature of the app stores that

00:26:15 ◼   ► it's very competitive it's very um I

00:26:18 ◼   ► wouldn't cut throats the wrong word but

00:26:20 ◼   ► like that's the reality is that we were

00:26:21 ◼   ► you know we were competing for a very

00:26:23 ◼   ► limited number of of users attention and

00:26:26 ◼   ► so if it's like just not doing it like

00:26:30 ◼   ► not then just like don't buy ads be

00:26:33 ◼   ► and don't go down sort of into this road

00:26:35 ◼   ► because the nature of what we're doing

00:26:37 ◼   ► here is we're just paying money to get

00:26:39 ◼   ► Ateneo to pull the attention away from

00:26:41 ◼   ► something else because whatever was

00:26:42 ◼   ► gonna be the organic first hit there you

00:26:45 ◼   ► know this is what we are now pulling

00:26:47 ◼   ► money away from by buying it and that's

00:26:49 ◼   ► maybe kind of weird but that's the

00:26:51 ◼   ► reality that's the system that Apple's

00:26:52 ◼   ► building and if this is the marketplace

00:26:55 ◼   ► in which we want to work and operate

00:26:56 ◼   ► then I think taking full advantage of

00:26:58 ◼   ► that as best we can is serve the

00:27:00 ◼   ► responsible appropriate thing for us to

00:27:02 ◼   ► do yeah exactly

00:27:04 ◼   ► and I would say like the the biggest

00:27:07 ◼   ► takeaway I have is you know you might

00:27:09 ◼   ► have some idea of what you can pay what

00:27:11 ◼   ► things will cost how effective ads will

00:27:13 ◼   ► be but nothing beats actually trying it

00:27:16 ◼   ► and Apple made it is really easy on us

00:27:18 ◼   ► because they sent everybody $100 promo

00:27:21 ◼   ► credit and I don't know if all new

00:27:22 ◼   ► accounts will get that or if only the

00:27:24 ◼   ► existing dev accounts got it last week

00:27:25 ◼   ► but the hundred promo credit is awesome

00:27:28 ◼   ► because you couldn't you use get $100

00:27:30 ◼   ► worth of free advertising and that can

00:27:31 ◼   ► be your cap and that can be it so you

00:27:33 ◼   ► couldn't literally get free ads and then

00:27:35 ◼   ► learn the data from those ads you can

00:27:37 ◼   ► learn what keywords are working you can

00:27:39 ◼   ► learn what your average cost per tap or

00:27:41 ◼   ► your average cost per installation ends

00:27:43 ◼   ► up being and that can further inform

00:27:45 ◼   ► what you do if you don't get the free

00:27:47 ◼   ► promo credit or if you want to go past

00:27:48 ◼   ► that you can actually learn a lot with

00:27:50 ◼   ► not that much money relatively speaking

00:27:52 ◼   ► to the cost of computers and developer

00:27:54 ◼   ► accounts and developing apps and stuff

00:27:56 ◼   ► like if you want to put in 50 bucks a

00:27:58 ◼   ► hundred bucks that seems like a lot of

00:28:00 ◼   ► money into a lot of people but if you

00:28:02 ◼   ► put that in there you will get so much

00:28:04 ◼   ► data out and you will find out like

00:28:06 ◼   ► really what these things are what these

00:28:08 ◼   ► things do for you what they cost and

00:28:09 ◼   ► that's true of all advertising like

00:28:11 ◼   ► nothing beats just trying it and a lot

00:28:14 ◼   ► of times like you know a lot of times

00:28:15 ◼   ► you won't learn you can theorize as much

00:28:17 ◼   ► as you want you can you can run

00:28:19 ◼   ► theoretical numbers but you have to just

00:28:21 ◼   ► try it and sometimes it doesn't work out

00:28:23 ◼   ► and that's kind of the risk you take by

00:28:24 ◼   ► trying it but usually it and if you can

00:28:27 ◼   ► make enough money per user of your app

00:28:29 ◼   ► to to cover what these things tend to

00:28:32 ◼   ► cost and like it like my my cost per tap

00:28:35 ◼   ► is in like the 20 cent range right now

00:28:37 ◼   ► and it's going down as everyone's promo

00:28:39 ◼   ► credits run out so to give you some idea

00:28:41 ◼   ► what you might be paying what might be

00:28:43 ◼   ► spending here

00:28:44 ◼   ► you know if you can figure out how to

00:28:47 ◼   ► make that work for your app just try it

00:28:49 ◼   ► and and just and see what it does for

00:28:51 ◼   ► you

00:28:52 ◼   ► this is now just part of the it part of

00:28:55 ◼   ► the reality of working in the App Store

00:28:56 ◼   ► and so you got to try it put some money

00:28:58 ◼   ► into it and understand that sometimes

00:29:00 ◼   ► it's like I've put our money into

00:29:01 ◼   ► advertising and it kind of feels I'm

00:29:03 ◼   ► just throwing money away and in some

00:29:05 ◼   ► ways maybe that's the case I'm not doing

00:29:07 ◼   ► it right but the reality is just the

00:29:09 ◼   ► cost of doing business and you owe it to

00:29:11 ◼   ► yourself if you take your business

00:29:12 ◼   ► seriously to at least try it I think and

00:29:15 ◼   ► understand it rather than just just

00:29:17 ◼   ► counting it out of out of hand

00:29:19 ◼   ► exactly all right well we're out of time

00:29:22 ◼   ► this week thank you everybody for

00:29:23 ◼   ► listening and we'll talk to you next

00:29:24 ◼   ► week bye