Revealing the Secrets of the AppStore

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iphone app marketingHow long after you download an app from the App Store — whether free or paid — do you actually use it? If you're like most iPhone/iPod touch users, the novelty of using a new app starts to wear off within days of your downloading it, according to new stats from Pinch Media.

The company builds analytic tools designed for developers who need to monitor their App Store downloads, app usage time and other data that can be used to develop app marketing strategies. Pinch also sells ad space on free, ad-supported apps to advertisers.

Based on an analysis of 30 million downloads, only 1 percent of people who download an app are still using it after 90 days, according to a slide show presented by Pinch CEO Greg Yardley at the New York iPhone Developers Meetup on Feb. 18. The company says its stats are derived from the use of its tools in a "few hundred" apps including several that have garnered the top spots in free and paid categories.

Not surprising, paid apps get slightly more use over slightly more time. However, the decline in usage for paid apps is nearly as steep as for free apps. Entertainment apps tend to retain the attention of users the most over the long term, Yardley says.

Developers who expect to earn revenues from advertising aren't likely to do as well as devs who sell their apps, according to Yardley. A developer stands to make at least $0.70 per paid app. To equal the same revenue, a dev would need the ad space on his app to sell at a rate of $8.75 per thousand views. Ad rates, however, are typically $0.50 to $2.00 per thousand views.

Less than 5 percent of apps are suitable for advertising and no one knows which ones those are until after they launch, Yardley says. Bottom line? Sell it, he advises.

Finally, according to the company's analysis,  the average price cut typically hikes demand for an app by 130 percent. The average price increase dampens demand by 25 percent. The longer an app has been on the App Store's shelves, the less impact price raises or cuts have on an app's download trend.

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