The app life cycle is short – developers need new ways to generate revenue (part one)
Introduction: Half of all apps will be used half as much three months after they hit peak usage. This decline continues steadily until ten months after hitting a peak, where the average app has less than a quarter of the use it once enjoyed or worse, becomes a zombie on the phone deck awaiting deletion. At the same time just over half of all developers make less than $1000 per month from apps.
Making apps pay is tough for the majority of developers. In this post (part one) we discuss the importance of understanding the app lifecycle. In part two we will take a look at monetization models and explore the relatively new area of call triggered advertising and how it can provide a much needed incremental revenue stream – for any app, whether its in use or not.
More detail can be found in the Calldorado White Paper – Monetizing and Extending the App Lifecycle. Download it here for free.
It is a scene played out on every smartphone and tablet. A user downloads an app and uses it frequently for a month or two before shifting his attention elsewhere. For app developers this presents two interrelated issues around the app life cycle; cost per acquisition and on-going user engagement. Its absolutely crucial to hit the right balance between the two – with a lower cost-per-acquisition and a more long lived on-going user engagement, the higher the revenue that is generated.
The good news for developers is that apps are receiving a lot more attention. Nielsen figures for example, suggest that between 2012 and 2014 the typical mobile and tablet user went from spending nearly 23 hours on the 26 apps they had downloaded to spending nearly over 37 hours, on the same number of apps.
Yet although time spent on apps continues to increase, demand for new apps hasn’t kept up. Last summer Deloitte found the average smartphone user was downloading 1.82 apps per month compared to 2.32 the year before. It also found nearly one in three respondents (31 per cent) had never downloaded an app, up from one in five the year before, and a staggering 90 per cent had never paid for an app.
The attention is there but it’s concentrated on fewer apps. Perhaps we’ve hit a saturation point with the amount of apps that consumers download and use?
Developers need to look closely at the lifecycle of their apps and that throws up an uncomfortable truth. The latest research from Vision Mobile suggests that for just over half of all developers, income levels are challenging. With 17 per cent making no money at all, 18 per cent making less than $100 per month, and 17 per cent making up to $1000 per month – more than half of the market is making less than $1000 per month.
The research draws an ‘app poverty line’ at $500 per month and shows that one third of developers exist below it.
With the right marketing strategy and budget in place, developers can achieve an early flurry of downloads. But monetization (revenue) only really begins when the app is in use.
Check back next Monday to read part two of this post or download the free Calldorado White Paper – Monetizing and Extending the App Lifecycle.