Making iPhone Apps Pay

Analytics firm says developers should promote other apps, solicit reviews and send viral invites to make money.

As the iPhone App Store swells to more than 30,000 applications, mobile app analytics firm Flurry has some advice for iPhone developers: treat applications like songs.

Like a song, a standout mobile app needs a good artist, a good producer, a strong distributor and plenty of promotion, says Flurry President and Chief Executive Simon Khalaf.

On the iPhone, Apple ( AAPL - news - people ) ably fills the role of distributor. The developer is, of course, the artist. The other two roles--production and promotion--often get skipped as an app rushes to market. But Khalaf argues that expert guidance from firms like Flurry can make or break an app, much the way a seasoned A&R team guides the launch of a new musical act. The payoff is potentially huge. Khalaf says a developer with two best-selling apps can make as much as $10 million to $15 million over the life of the apps if they are well-marketed.

There are plenty of start-ups focused on making iPhone apps pay. Flurry differs from others in a few key ways. A former developer itself, it is smaller than rivals like AdMob and Pinch Media. Unlike those two firms, Flurry does not connect developers with advertisers. Instead, it focuses on "deep analytics" for apps. Khalaf, who likens the firm to a Google ( GOOG - news - people ) Analytics or Omniture ( OMTR - news - people ) for mobile content, says, "We enable developers to build better apps by helping them understand how people are using them."

So far, about 5,000 developers, representing 3,000 apps and several mobile platforms (iPhone, Google Android, BlackBerry and JavaME) have signed on. Flurry's main focus is the iPhone, as most of the applications it supports (about 72%) are iPhone-related. (See "Gaming Apple's App Store.")

Like songs on iTunes, sales in the App Store are hit-driven. Rapid turnover--around 130 new apps a day--means the average iPhone app or game sells strongly for just three months, often peaking four to six weeks after launch.

Flurry's job is to push that abbreviated "sales curve" up and out with its software, which is free and embeds easily into existing applications. "People mistakenly think of the App Store as a marketing machine because it's a virtual store," says Khalaf. "But just like in a store, consumers get fatigued and lose interest."

Reaching out to consumers is one way to increase sales. Flurry helps by telling developers when to contact their users to yield the best results. The developer of a free game could program a message to pop up at a certain point that would encourage players to purchase one of its paid games. Flurry's software assists by tracking when most users stop playing a particular game--on level 5 in a 10-level game, for instance. Developers can use that information to serve up an invitation at the appropriate moment. Flurry says some developers, including a videogame publisher with a casual puzzle game, have already adopted this tactic. Flurry estimates that a well-timed invitation could increase weekly revenue for a particular app by as much as 40%.

Developers with only one app could use the same tactics to promote other people's apps, for mutual benefit. In June, Flurry plans to add a feature to its service called AppCircle that would launch a menu of agreed-upon apps within the original app for this purpose.

Established publishers like ngmoco, Digital Chocolate and Gameloft ( GLOFF.PK - news - people ) do these kinds of cross promotions already. But small and mid-sized developers traditionally haven't had the resources to do this. Flurry also plans to provide its developers with additional data, such as which apps garner the most interest from users, even if they ultimately don't purchase them.

Flurry's second rule for success: get as many users as possible to rate and review apps. Currently, iPhone users are prompted to do so (by the App Store) only if they are deleting an app from their handsets. Peter Farago, Flurry's vice president of marketing, says developers should solicit feedback well before that point. Even a negative review, he says, is better than no review, reasoning, "You want to seem popular." (Another Flurry observation: most apps in the App Store are rated, overall, three out of five stars, with paid apps garnering slightly higher ratings than free apps.) Similar to the games invitation, Flurry's software will be able to help developers pinpoint the optimal time to ask users to write a review. The idea is to catch them in a good mood--after they finish a game level or complete a scheduled task, for instance.

Under the same philosophy--that getting noticed is the most important step--Flurry also plans to support viral invitations by June. Farago says developers could design apps that give users points or other incentives for inviting people to download and try the same app. Or they could just build in prompts, with Flurry directing where to insert them. Such tactics are rare now, but in the new, multi-tasking version of the iPhone operating system (3.0), slated for official release this summer, e-mailing friends from within an application will be easier than ever.

The iPhone's 3.0 upgrade will also enable developers to sell subscriptions to their apps. Farago says Flurry will help developers decide whether to offer subscriptions by measuring the size and loyalty of their audiences.

Flurry plans to support all these services with its analytics data, which measures everything from the number of times consumers use an app to how long they use it, and their location (by country). Several features go deeper, tracking how users navigate apps, logging each move they make in sequence while keeping the data anonymous.

Khalaf says Flurry's combination of data and recommended actions benefits developers (who stand to make more money), Apple (who will sell more applications) and Flurry itself (which plans to charge for data and research reports outside its basic analytics). But some of Flurry's competitors say the firm's service isn't complete without some type of advertising partnership. Says Greg Yardley, co-founder of Pinch Media: "If I didn't touch the ad world, I wouldn't be doing my job as an analytics provider."