How IE Business School used AppTweak to research the impact of ASO

Challenge

Between November 2020 and March 2021, Apple and Google announced their intention to reduce royalty rates for small app developers from 30% to 15%.

A few years later, professors Annamaria Conti and Juan Santaló at IE Business School initiated an ambitious research project to examine the economic impact of these “quasi-random announcements” on app store product launches and their quality.

The scope of this project was to understand how the measures taken by platform owners to regulate platform transactions affect the volume and quality of these transactions. The two competing hypotheses the researchers investigated were:

• The reduction in royalty rates might have induced developers to increase their efforts, given they could now capture a larger share of the revenue generated.
• An increase in the expected profitability of developing apps for small app developers might have attracted apps of lower quality to iOS and Android platforms, exacerbating a lemons market problem.

To accomplish their goal, the researchers gathered comprehensive and granular data on app performance before and after the policy changes, as well as on developer ASO strategies.

Solution

IE Business School partnered with AppTweak for its API, as AppTweak has data on over 6 million apps on the Apple App Store and Google Play Store in 100+ countries.

AppTweak offered several key advantages over competitors:

• Robust data collection: AppTweak’s API allowed the researchers to gather extensive data on monthly downloads and ASO activities for a large sample of game apps across iOS and Android platforms. This data included critical metrics such as download estimates, Top Charts rankings, and app ratings.
• Detailed ASO analysis: With AppTweak, Professors Conti and Santaló could meticulously analyze the impact of various ASO strategies (e.g., screenshot changes) on game downloads over time.
• Comprehensive market insights: AppTweak provided valuable insights into the broader app market, helping the researchers understand the implications of royalty rate reductions on app quality, developer participation, and competition.

Dataset & API calls

IE Business School analyzed 16,897 game apps released between November 2019 and November 2021 (by companies and individuals), marketed in the US, UK, France, Germany, China, and the Russian Federation. The following API calls were used for this study:

• Metadata History: Changes to screenshots, icons, titles, etc.
• Top Charts: The top 500 game apps across subcategories.
• Downloads & Revenue Estimates: Estimated downloads & revenue generated over time.

Results

Despite the initial policy change aiming to support small developers by encouraging innovation and new app development, the research by Professors Conti and Santaló uncovered the “hidden costs” of these policy changes.

While the royalty rate reductions indeed encouraged a surge in new app releases by small developers, the majority of these new apps were of lower quality. As this influx of lower-quality apps might have confused consumers, Conti and Santaló found that after the royalty rate cut, it became more crucial for app developers to invest in ASO activities to stand out in a crowded market.

The collaboration between IE Business School and AppTweak led to several interesting findings for app store marketers:

• ASO has a positive impact on downloads: The data revealed that games implementing effective ASO strategies experienced, on average, a 9% increase in downloads on the App Store and a 12% increase in downloads on Google Play after the announcement that Apple would reduce the royalty rates for small app developers. This demonstrated the direct impact of ASO investments on app performance.
• Screenshot optimization plays an important role: Changes to app screenshots were particularly impactful. Apps that updated their screenshots saw a substantial increase in downloads (+6% on iOS and +9% on Google Play), underscoring the important role of visual elements in attracting users.

Video testimonial from Prof. Annamaria Conti, Professor at IE Business School: