Life in the Android app market is quite fascinating these days. On one hand you have the ongoing growth in market size and app revenue. For example, in 2012 the Google Play Store had only 600,000 apps. Today, that figure is closer to 3 million. Android app revenues are set to top iOS revenues this year and global overall app revenues are predicted to reach $102 billion by 2020. Also, just under half of global app developers are focussing mainly on Android apps, compared to less than a quarter for iOS.
On the other hand, you have the growing issue with app monetisation where 64 per cent of Android app developers are operating under a poverty threshold of $500 a month in revenue. The average app loses 77 per cent of its daily active users (DAUs) within the first three days, and 90 per cent within the first thirty days. Users are also spending less time on apps – 27 apps per user per month at the last count.
It is too easy to look at the Instagrams and Whatsapps of this world and think everyone else in the app industry is having similarly good times but that unfortunately is not the case. The hobbyists and part time developers that make up 43 per cent of app developers certainly are not all having a great time. For most of these guys, there isn’t the huge pot of resources and revenue to draw from and the growth or demise of their app can hinge on how much revenue the app generates and whether or not users continue to engage. Apps that don’t yield good returns, in terms of engagement and revenue, will be abandoned for more fruitful projects.
It goes without saying that after all the time and effort that developers put into creating an app, they would love to see something back. No one wants their app languishing untouched in forgotten corners of user’s phone or, worse still, deleted for good. However, the current climate makes it more difficult than ever. There are lot of money in the Android app market but that money doesn’t seem to be reaching everyone involved.
So what can app owners and developers do to grow their app business in today’s market? How can they make sure they get their share of the revenue pie and that users continue to engage with their app? How do you make money from apps when engagement is not always high?
Selling anonymised user data can be a good way to make money
User behaviour can give app owners insights into trends and habits to influence product updates and other ideas. Some developers sell this data to third parties, offering valuable information on what to do and what not to do. Privacy and data protection are obviously issues here with some user more concerned than others. App owners can mitigate this by adopting an opt-in approach where users are asked before downloading the app if they are happy for their data to be used in this way.
In-app advertising is a good option for some
For apps that already have significant amounts of daily users, in-app advertising provides an easy route to revenue. Consistent daily impressions should lead to constant revenue. However, not all apps, regardless of how good they are, have a good amount of daily users. Take the humble calculator for example. We all have one on our phones that we rarely use but will never delete for fear of not having one when we need it. The app might never be deleted but it will rarely be used, frustrating owners’ in-app advertising campaigns.
Adding a secondary functionality is an increasingly common option
Some developers are now integrating SDKs into their apps to enable secondary functionalities that improve the user experience. A common SDK is the caller ID SDK which will tell users who is calling even if the number is not saved in their phone book. On the call summary page, which appears at the end of the call, some providers enable ads to be served. Revenue is generated even if the user doesn’t engage with the core app and the secondary caller ID functionality does not interfere with what the core app actually does. With CPMs in the region of 150 per user per month and the option of a subtle re-engagement link on the call summary page to take users back to the app, it’s easy to see why this is an increasingly popular option. Apps like Mega Voice Changer and Simple Notepad have seen their app revenue increase but more than 10-fold within a month of integrating an SDK to their app and active users more than doubled (14 per cent to 33 per cent) as a result.
However you look at it, there is certainly a lot of money to be made and there is still an appetite for Android apps from users. The bar is just higher than it has ever been. And beyond making money from apps, owners must make sure they are investing back into the app to improve the user experience.
Developing an app and just putting it out there is not going to do it these days. Developers, especially the part-timers and the hobbyists, must explore all the opportunities they have available to help them make the most of the ongoing growth in the market. Resting on your laurels is not an option and only the well-equipped will be able to make the most of the amazing opportunity that is the Android app market.
Claudia Dreier-Poepperl, Founder and CEO, Calldorado
Image Credit: Carballo / Shutterstock