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Spotlighting or Free of charge? An empirical study on Amazon’s App Marketplace
Hong Chen, Kevin Lachaud, Wenqi Zhou

Last modified: 2017-03-25

Abstract


We examine the effect of visibility and pricing, and their interaction, on apps’ popularity in a marketplace. Specifically, we study Amazon’s Free App of the Day (FAD), a promotional strategy which spotlights a single app daily and temporally makes it available free of charge during the same promotional period. We coded a web crawler to automate data collection. We first collected all Apps that have been adopted FAD promotion every day during 2015 summer. We then collected those apps on Google Play daily during the same time period, if available. By using data from both Amazon and Google Play, we are able to differentiate the effects of high visibility and temporally free pricing resulted from Amazon’s FAD promotion. We go a step further to investigate how they affect App’s popularity on Amazon, i.e. volume of online user-generated conversations and sales rank, which in turn affects the apps’ overall market performance. Increasing visibility and lowering price are two commonly used marketing tools. We believe our conclusion from this unique context of Amazon FAD can contribute to our understanding of the relative effectiveness of these two tools in the App market.

Keywords


App market, E-commerce