Meet the Applause Index: The Stock Index for the Apps Economy

Applause-index3813When we launched Applause last month, we did so with the goal of helping companies gain greater insight into the user satisfaction and quality of their mobile apps. And the early response thus far has been amazing – beyond our wildest expectations.

But in doing so, there was an unexpected consequence – the good kind, but unexpected nonetheless. As we crawled 60 million app store reviews – and generated hundreds of thousands of Applause Scores – we found ourselves sitting on a mountain of aggregate data about the greater apps economy.

So what did we do with this data, you ask? Well we considered using it for world domination, but then got distracted by a bumble bee in the office. So the Applause team went and built the Applause Index – the first-ever way to measure and track the state of user satisfaction in the mobile apps economy.

Similar to the Dow Jones Industrial Average, the Applause Index provides a daily look at how users feel about the bellwether iOS and Android apps and assigns a weighted, cumulative score (again, similar to those used to measure the overall stock market). This enables journalists, analysts and mobile decision makers to understand trends in the macro apps economy and make more informed decisions.

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The Applause Index also includes a full complement of sub-indices that measure specific categories of market-representative apps across ten key categories, including Gaming; Lifestyle; Entertainment, Travel and Content (much more detail below if you’re the wonky type who likes to know this stuff).

The Applause Index is calculated based upon the Applause Score of 60 iOS and 60 Android apps that meet rigorous selection criteria. It then applies a weighted formula to produce a daily cumulative score across these bellwethers. The result is a top-down look at the overall sentiment of users about the apps economy; across categories; across app stores; and over time.

Selecting Apps for the Applause Index

The selection process for the Applause Index was data-driven and rigorous.  The data scientists who helped create Applause did extensive research into how financial indices were built, weighted and reported – and the Applause Index was created using the same process and premises. After extensive modeling, specific criteria were selected, including:

  • Number of app versions and app reviews
  • Length of time an app has been available
  • Performance data across Applause Attributes
  • Representative allocation across app store categories
  • 100% overlap between the list of 60 iOS and 60 Android apps

Scoring the Applause Index

To come up with the overall Index scores for iOS and Android, as well as the scores of the sub-indices, the Applause team once again applied deep mathematics to ensure the result was more than just the total of the selected apps’ Applause Scores. The selected apps were subjected to a complex weighting process similar to those of popular stock market indices.

 The Sub-Indices

Because the Apple and Google Play app stores use different category structures, the Applause Index maps similar apps and categories to create 10 sub-indices. Each of these is comprised of 15 iOS and 15 Android apps. The Applause category-specific indices are as follows:

  • Business & Productivity (business, finance, utilities, tools)
  • Content, Books & Reference (news, content, books, reference)
  • Education (education tools and classes, science)
  • Entertainment (TV, casual, movies, entertainment-themed)
  • Games (games, sports games, arcade & action)
  • Health (health, health & fitness)
  • Lifestyle (includes shopping, social, food & drink)
  • Music & Multimedia (music, video and photo tools)
  • Sports (major sports leagues and sports news)
  • Travel (travel, transportation, locale-specific resources)

Moving Forward

The Applause Index and Sub-Indices will be updated daily, and the list of apps will be formally reviewed each quarter – with some apps being added or removed, depending upon market trends. We also plan to release frequent Applause Index research reports on a regular basis, so be sure to connect with us on the social medium of choice to stay up-to-date on all the news.

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The Applause Index marks a new day for the apps economy: Apps are everywhere and touch nearly every aspect of our lives. Now there is a tool, based on rigorous math and supported by a dedicated team, which enables analysis of how happy users are with the mobile apps economy.

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