For Stephen Molloy, writing a book on the evolution of smartphone apps has been more work than he could have imagined, with months of interviews, writing and editing. The aim of the project was to better understand what makes successful apps popular, and find out how top brands are using apps to promote themselves.

Over the past year he’s spent time meeting with people like Disney Games General Manager Bart Decrem, and the Saatchi and Saatchi Worldwide Digital Director Tom Eslinger, for Appvertising, a new book exploring what makes an app successful.

“‘You’ve got ‘appreneurs’, which are these people launching new apps all the time, maybe different games,” says Molloy. “You also have branded apps which companies give away to promote what they do.”

Many companies now offer free apps to drive sales of another service. For example, insurance company AAMI offers an app to assist with an insurance claim. It’s not the company’s main business, but it is another way to promote its services.

A couple of weeks back we spoke with Steve Fanale of AppVillage, a new virtual incubator for apps. AppVillage has established a royalties model where anyone involved in the development of a new app, from the person who came up with the idea, through to the product manager and developer, share in the royalties from any sales. It takes the model previously used by book publishers and music labels, and translates it to a digital product; apps.

“AppVillage has a virtual development environment where people can build and manage these projects,” Fanale told FLT. “We take on the responsibility of managing the project and marketing the  app.”

Making money from apps is still a bit of a dark art. One study, by app marketing group App Promo, found that 60% of apps don’t generate enough income to break even. It’s one of the reasons we’re starting to see new models for app development starting to surface.

Molloy does agree with the publishing analogy, although suggests developing apps is more like investing — you need to take a portfolio approach and hope that one will do really well.

“The best way to think about it is how an investor invests in a whole range of startup companies with the hope that one of them is the next Facebook, or how a publisher signs a bunch of authors with the hope that one is the next Dan Brown or J.K. Rowling,” he says.

Molloy’s advice for launching an app:

• Create a standout app icon. It should be simple and be text free. Molloy says your icon needs to make sense anywhere someone can download it — it needs to work in Chinese, Arabic, French;
• Be different. Molloy says more than 50% of all app icons are predominantly blue or black. Using a bright colour like orange can help stand out;
• Make sure the price is right. Pricing should be discovered not invented — you don’t know what someone will pay until they’ve bought something. Molloy suggests charging no more than 99c if you can;
• Forget the ads. Molloy has found mobile advertising to be ineffective. He suggests getting your PR and marketing right. The first 48 hours of downloads are critical, as you’re given leeway by Apple to prove the app. If there are lots of downloads initially, you’re more likely to get in the rankings.

There’s a chapter in Appvertising titled ‘what should grow and what should go’, which Molloy says highlights the need to keep apps up-to-date, and customised for new platforms. At a recent mobile marketing meetup in Sydney, a developer from Lasoo (a retail catalogue startup launched by marketing company Salmat) explained how when the first iPad launched in 2010, Lasoo ordered one from the U.S., knowing it would soon be released in locally.

This allowed the company to to build and test an app for the device before other companies. Another example is Apple’s Passbook feature; the ‘digital wallet’ for storing vouchers, tickets and card details launched in September, yet companies like Qantas and Moshtix are only just starting to adopt the technology.

Molloy has developed 20 different apps now, for iPhone, Android and Windows, yet says the biggest success, SurfSpotting, was a surprise. The app, which allows you to find the nearest surf break, made $200,000 in a day, after being picked up on surfing blogs and in the media.

“You never know which app it will be. You just become more and more familiar with what works and what doesn’t.”