Be sure to read the updates at the bottom…This idea may violate the Facebook TOS but it has sparked some good discussion on alternative ways to do viral marketing.

This post is about an idea I thought up just before heading to SXSW. I’ve told this to a number of people at SXSW and, judging from the response from some of my most respected friends, this may be very, very interesting (someone from the Gaurdian actually shared my idea before I got the chance to).

The idea is this:

1. Release Grades 2 as a free app (no paid version, no lite version – just one app).
2. Place some ads in the app.
3. Allow users to get rid of ads with an in app purchase (maybe $1 or $2).
4. This is the new part: users can also get rid of ads for, say, a month by simply sharing the app on Facebook (which they can easily do right within the app).

1-3 are fairly rare, especially for high quality apps, but I think #4 could really blow this thing up. Some folks don’t hate ads enough to pay to get rid of them but, come on, all I have to do is share this app (which, presumably, I really like any way) on Facebook and the ads will disappear for a generous amount of time? I think a lot of people will go for that.

Say Bob is an average Facebook user and has 130 friends. Bob shares Grades 2 with his friends and goes ad-free for a month. We just lost a month of ad-revenue from Bob but out of those 130 friends I think it’s pretty reasonable to assume at least two of them would download a free, recommended app. So now those 2 new users have the same three choices – use the app with ads, get rid of ads for a dollar, or temporarily get rid of ads by sharing. I either make money from those two users or, if they choose to share, the process continues. Obviously not everybody is going to share the app on Facebook so eventually at some point I’m going to make some money – and probably a lot more than I would have made from just Bob.

This kind of marketing could also be very lasting. I made tons of awesome connections at SXSW so I am pretty sure I’ll have a very big launch but being featured on the top blogs, or even by Apple for that matter, produces big spikes that don’t last too long unless you can manage to stay high on the charts. This Facebook marketing, however, not only has the potential to be viral at the beginning but this kind of marketing has the potential to be very consistent and ongoing and may very well be the key to keeping Grades 2 high on the charts.

Compare that to buying ads or trying to get posters on college campuses. Those things cost tons of money for minimal return. The only cost here is the missed potential revenue from the users who share the app. To me, that is a very small price to pay for the kind of virality this kind of feature might produce. It also has the side benefit of appeasing the folks who hate ads but may not be willing to pay to get rid of them. Win-win all around.

Here’s what I’m thinking it’s gonna look like:

Speaking of Grades 2, I am aiming to finally submit it to Apple in the next few days so I’ll definitely keep you posted on how the Facebook marketing plays out.

What say you?

UPDATE: it is possible that implementing the following idea might violate the Facebook TOS. Will post another update when I get to the bottom of this (thanks Mogden)…

UDPATE 2: Hello cold water! If you look at Facebook’s page on application integration points, I think we can safely say that the following idea would violate their policy. Bummer. I’m sorry I didn’t look deeper into this before posting. I still think Facebook is a great way to spread your app virally – we just need to find ways to do it that wouldn’t be considered incentivizing.

UPDATE 3: Even though this may violate the Facebook TOS, I’m still glad I posted this because it has sparked some good discussion about ways to encourage viral sharing outside of Facebook.

1. swiftfoxsw mentioned in the comments that Twitter might be an alternative. It is not as ubiquitous as Facebook but definitely may be worth looking into.

2. Cody Fink of MacStories suggested possibly taking this idea into the real world: “Say a friend has Grades, and wants a month free of advertising. He can ask his buddy to download Grades, enter a four digit pin, and both users get Grades for free for one time between those two friends. To get more months for free, you have to ask more friends to download and try grades. I’m thinking like a classic referral code/name model.”

Very good ideas. You might even be able to use the Bump API to skip the whole referral code thing. You bump the phones together and both friends get it free for a month.

3. As a side note, some apps definitely do incentivize Facebook sharing and have gotten away with it. Most prominently, Doodle Jump (according to Ronan) “gives an achievement for posting your score to Facebook.” Also, in the comments Matt Rix says “Head Spin 3D basically does this. A user can get 8 hours of the paid game if they share their scores on Facebook or Twitter.”

In my last post, I talked about marketing lessons from Starbucks. The bottom line was that Starbucks tethers its brand to a pleasant and soothing experience. In this post I will begin getting into the nitty-gritty on how to utilize experience-based marketing in iPhone apps. All hail the power of cool.

One element of the Starbucks experience is the cool factor. Notice that they do not play Britney Spears music. Ponder the fact that they use highly stylish decor. And consider that they label their drinks with Italian names; Howard Schultz, emperor of Starbucks, claims this is to produce an atmosphere of “romance”; I think it is also to produce an atmosphere of “cool.”

Joe or Jane consumer may not want to be caught shopping at the dollar store. But they wouldn’t mind being caught in Starbucks. Indeed, Starbucks promises and delivers a considerable ego-stroking. This ego-stroking constitutes part of the experience that makes Starbucks so pleasant: if each time a customer goes to Starbucks, they get a gentle ego massage, this makes it more likely that they will come back and have pleasant associations with the brand.

Apple also utilizes the cool factor. Apple’s stylized iPod commercials gave the iPod an artzy aura; the commercials promised customers that buying an iPod would allow them to bask in that aura. This marketing appeals directly to the subconscious, initiating an emotional impulse to buy the product. This is more powerful than appeals to the mental faculties with talk of great features or low prices.

iPod ads in Hong Kong

Hence, our apps should exude the aura of cool and deliver an ego-stroking. Just as Starbucks patrons love to be seen at Starbucks, our customers should love to be seen using our apps. The more vigorous the ego-massage, the more likely customers will be to use the app frequently and want to use the app around other people.

For instance, Tapbots have become famous for taking utilitarian tasks and making them cool and delightful. Users love to be seen using Tapbots’ convertbot. The genius of this little app is that, although it deals with a banal task (converting units), it uses an interface that makes the user feel like they are commanding the Starship Enterprise.

Convertbot

Next time I will continue to discuss ways to apply experience-based marketing to iPhone apps.

—Josh