In recent years, the mobile application economy has boomed as apps have become the de facto way for consumers to access online services and products. There are currently more than one million mobile apps in the Google Play Store and almost 1.5 million in the Apple App Store, and yet only a fraction of available apps ever get discovered. Of this fraction, only the top apps are able to generate significant revenues: the ones with strong organic growth and those with well-funded publishers reap the lion’s share of all profits in the industry.
Why? Because it isn’t enough to have an app that people can find and download, especially when you consider that the majority of apps are now free to download—and that they are monetized through advertising and in-app purchases. If advertisers are to make their money back—not to mention a profit—developers need to build apps that people will actually use.
So while download figures have been the primary means of measuring an app’s success, they merely tell part of the story. You only have to look at Rovio’s Angry Birds for evidence of this. Despite the app having been downloaded billions of times, Rovio only makes 10% of the revenue of its competitor Supercell. In-game purchasing is now the dominant way to make money in mobile gaming. To make that work, developers know more about how their apps are used post download—the first week of downloads being the critical period.
This level of understanding can’t be underestimated, especially because the success of a new app isn’t assured by a publisher just because it’s previously produced a popular app. Indeed, there is little correlation between the popularity of one app and another app from the same publisher. Insights into app usage are vital to the development of future apps and related ad campaigns. Not just that, but accurate, actionable data is needed to optimize user adoption, loyalty and engagement levels, as well as the crucial monetization dynamics.
So in answer to the question “What will be big in the world of apps this year?” we believe 2015 needs to be about more sophisticated engagement metrics for the app industry. We need to shift from analytics to providing clients with a deeper, more meaningful understanding of how consumers use and engage with apps. To make that happen, we need to gather data across different levels of granularity including demographics, device models, and consumer behavioral segments.
At Verto we’re doing just that, and we’re providing clients with that data in near real time so they can understand what makes an appealing app and where to invest. Just as the world of TV, Web, and radio measurement no longer counts the number of devices sold, focusing instead on audience measurement, so, too, must the world of apps. That time is now.