According to recent research from Gartner, less than 0.01% of mobile apps will be considered a financial success by their developers by 2018. So how can a developer’s app be among the financially successful apps? Beyond developing an app which 1) provides users with value, 2) for which they’ll pay, and 3) one that isn’t easily copied, developers need to look at app discovery and promotion as a source of revenue.
When I think of mobile app distribution today, I’m reminded of the PC software download market eight years ago. In 2006, there were a lot of software utilities for PCs – from anti-virus to productivity tools – whose developers were making pennies on every download.
And then, some deep pocketed developers – companies like Google, Yahoo! and Microsoft – began offering developers $1 – $2 per download in the US, Canada and Western Europe. This changed the economics of the market for developers willing and able to integrate an offer to download a search engine or other prominent applications into their software’s download.
This change in market dynamics brought much needed revenue to many developers, who, as a result, hired more programmers to develop better software which provided end users with greater utility and value.
Cross-selling (via the discovery and promotion of relevant products and services) is a sales tactic which has generated revenue for sellers for decades if not centuries. Software developers over the last decade have generated additional revenue to make software development profitable in a world where end users had grown reluctant to pay for utility.
As I look at the mobile app ecosystem in early 2014, I see a market which is similar to the PC software utility market in 2006. More important, I see a number of companies, including Google, Yahoo! and Microsoft, as well as leading hardware manufacturers, mobile operators and media companies, who are (or at least should be) willing to pay for installs.
So how can app developers take advantage of this market opportunity to achieve profitability?
- Incorporate app discovery into the usability of your app: All applications have natural user patterns and paths. Developers looking to optimize app revenue will incorporate app discovery and promotion into their app’s usage pattern. For example, for a finance app, adding links to applications that provide additional and complementary financial information on the screens when users are being offered financial data will generate app downloads and revenue. And for a weather app, optimized app discovery will mean offering ski applications during the winter for users who check out the weather at ski resorts, while parents using the same app to check out school cancellations will be offered local applications.
- Use your app data to optimize app discovery and promotion: The best resource for optimizing app discovery and promotion is the app’s internal data. Developers who mine their internal usage data will be able to uncover the best days / times / in-app locations to offer complementary apps. And depending on the app, time of day, day of the week and time of the year, that can make a tremendous difference in app promotion performance. The developers who monitor and then optimize according to all of their data across time will generate the greatest revenue.
- Seek out potential partnerships with complementary apps: Every application is surrounded by complementary apps which would probably interest your users. Why not reach out to these potential partners to set up a cross-partnership deal where each will offer the others app in the installation process? Even if one of you has many more users / downloads, there are still ways to close a deal which is mutually beneficial. After you run the first cross-partnership, review the process so that you can improve performance with the next cross-partnership opportunity (and every app has at least 10 or 15 apps with which they can cross-partner). Though such partnerships won’t bring in direct revenue, they will increase your install base, which will result in greater revenue from user-based monetization tactics as well as make your app more attractive to the partners willing to pay for installations. And you will gain experience running these campaigns which will enable you to better optimize performance when you run a campaign which will pay / install.
- Reach out to platforms that work with applications looking for distribution: The best way to generate revenue from downloads is by working with a monetization platform. These platforms have the right relationships in place and can help developers optimize performance to increase revenue while ensuring a positive experience for users. Platforms offer app developers a mix of games, utility apps, branded apps and other apps looking for distribution which will provide the right match between the developer’s application(s) and users.
App marketing is not easy. But if you’ve got a unique app in a market with real potential, you can prove the naysayers wrong and become profitable.
Elad Natanson is the founder of appnext, a multi-platform monetization and discovery network focused on mobile and social applications and games.