The Art of the Upsell: App-ifying Business Models


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Whether the future belongs to downloadable apps or web-based HTML5 sites, the fact of the matter is that the app sensibility born of widgets and the smartphone is going to inform the way in which digital content is built and distributed from now on. App design is already migrating from Apple and Android stores to the web. Just look at Google's Chrome Web Store and Apple's Mac App Store, where content providers such as USA TODAY and Slate essentially port their iPad versions back to the desktop. Just wait for the next wave of major website relaunches: You'll see how publishers are learning from the less cluttered and more immersive examples being set by the app experience.

More than that, the rise of the app has also helped content providers become more effective, more imaginative content merchandisers and has freed them up to experiment with new ways to make money directly from users. To wit, the very good Sports Illustrated Chrome app uses the HTML5 interface to fill the screen with the brand's lush and legendary photographic prowess in its daily free sections. But once the web app hooks readers with its deft, better-than-the-web design capabilities, it offers up paid modules (about 99 cents each) for swimsuit model images or special event coverage, such as the year's best 100 photos. Using the same model of incremental upsell that has become commonplace in mobile app stores, the magazine brand is learning how to package and price content back on the web.

Martha Stewart Living Omnimedia, Inc. is using the art of the upsell as well. Its latest iPad apps focus on cocktail prep and smoothies, respectively. The free downloads have a few categories of content but then offer cheap modules as in-app purchases. Many of these modules are aimed at specific niches, such as weight-loss smoothies or allergen-free drinks. Otherwise, commoditized recipe content becomes worth buying when it is targeted to highly specialized, personal tastes.

The app model is also proving to be a place for content experiments. In many users' minds, Dictionary.com would seem like a one-trick pony-albeit a great trick. Its enormous popularity on smartphones, with more than 30 million downloads, has given it a chance to test new configurations.

A 99-cent crossword-solver app, for instance, uses the word repository for a single, critical task that any puzzle maven would gladly pay a buck to access whenever he or she is stuck on 33 Across. Likewise, the company is working on flashcard learning apps and is learning more about which of these spinoff models should be incorporated back into the core Dictionary.com app and website.

The age of the app encourages publishers to rethink the utility of their own content and imagine it in new use cases where the circumstances add value. Dictionary.com's handy mobile resources didn't exist for the brand just a few years ago, when they would have been helpful during a contentious Scrabble game or while solving a crossword puzzle on the train. Now these resources do exist. The content is the same as the ad-supported, highly commoditized variety that has been available in the web browser for years, but new context inspires renewed content.

At an even more sophisticated level, publishers can craft a large suite of niche apps into a network that can serve multiple goals. Rodale, the publisher of Men's Health and countless nutrition books, is pioneering this model. The publisher has scores of apps, from a game version of the Eat This, Not That book series to highly targeted workout apps for tightening butts, waists, etc. The free apps give the publisher some reach, while the paid apps (up to $7 and $8 for books) deliver direct revenue. Across all of these properties, however, Rodale has created, in essence, a private network that can be leveraged in many ways. Promotional units in the apps can upsell incremental new content, cross-sell other apps, or be put in the service of an ad client. Much like a newsletter publisher in the preweb days, the apps effectively build a list of like-minded receptive users, which the publisher markets efficiently and without the need to buy audiences from ad networks elsewhere.

Over time, I suspect that the rise of the app in digital publishing will show itself to be much more than a brand extension or just another distribution platform. It is developing into a laboratory where content can be reused and reinvented to test new designs, products, and business models.