21/11/2016

Paid Apps Economy

Today’s Talk• About Lightricks• Paid models: Pros & Cons• How to succeed with a paid model

Lightricks - History• Bootstrapped in 2013• Jerusalem-based• Five founders• Raised $10M in August 2015

Facetune• Launched in March 2013 for iPhone

• iPad - September 2013• Android - July 2014

• Over 8 million units sold• #1 top Paid App in 128 countries (App Store)• Google Best of 2014

Enlight• Launched in March 2015• Apple’s Editors’ Choice• Apple’s Best of 2015 Worldwide• Universal (both iPhone & iPad)• Over 2 million units sold

Paid Model Doesn’t Work Well on Android• Lots of lower-end devices• Lower rates of users who entered their credit

cards• Higher piracy rate - much easier to download

pirated versions• Users are used to free software

Paid Model - Pros• Small market - easy to get to the top• Money from Day 1 • Easy to optimize• Relatively easy to measure

Paid Model - Cons• Competitors are likely to release a free version• Limit on how much you can earn• Harder to achieve brand recognition• Ongoing cost can be problematic (support,

backend, etc.)• Amount of money you can extract per user is

(usually) limited

What Does Work With The Paid Model?• Great products• Ads - mostly Facebook• PR• Influencers• Social Media

What Doesn’t Work With The Paid Model?• ASO• Most ad networks• Limited effect of word of mouth• Android

Exploration Vs. Exploitation• There will always be a trade-off between trying

new things vs. doing what has worked before• Leave some budget for exploration!• Document what you’ve tried• Try things you don’t expect to work

Bursts• Maximizing profits by getting to the top of the

charts, which will bring organic installs• Measurement of success is not by CPI but by

blended CPI, which takes into account the organic installs as well as the paid installs

• Easier on paid apps since less installs are needed to get to the top, and no need to extract value from users later.

• Can start with a very low budget - we started with a $500 marketing budget

More Insights• Videos vs Photos (and other formats)• Facebook & Instagram work best for paid apps• Overall volume in paid category is declining• Seasonality has a strong effect• New devices are a strong signal for potential

paying users

Advertising Tips• Easy to measure and distinguish between

channels - CPI (no need to calculate LTV)• Test as much as possible• Explore every possibility and exploit what works• Basic statistics knowledge can help

The Future• Recurring revenues - subscription model