The Android app market is growing and it is an exciting time to be involved, but monetisation continues to be an important issue.
Android app revenues are set to top iOS revenues this year and, according to App Annie, global app revenue is predicted to reach $102 billion by 2020. More than half of global app developers are also focusing mainly on Android apps which is fantastic news but, unfortunately, that’s not where the story ends. App monetisation is in a tricky position with 64 per cent of Android app developers operating under a poverty threshold of $500 a month in revenue.
Engagement is also in a precarious position with the average app losing 77 per cent of its daily active users (DAUs) within the first three days after the install, and 90 per cent within the first 30 days. The number of apps people spend time using is also on the decrease – 27 per user per month at the last count. The market might be growing but making money from apps and retaining users is certainly more difficult.
The likes of Instagram and WhatsApp might be making their fair share of profits but the hobbyists and independent developers that make up 43 per cent of mobile developers certainly are not all receiving their fair share. Most of these guys develop apps as side projects and their apps contribute significantly to the near 3 million apps in the Google Play store. For many of these guys, good engagement and a regular revenue stream is often the difference between whether or not the app gets developed or abandoned in favour of other more fruitful projects. There is also the argument that poor monetisation and engagement could lead to reduced growth in the Android market.
So what can developers and app owners do to grow their app business in the 2017 app market? How can they ensure that they are getting their slice of the growing revenue cake and buck the trend of poor monetisation and engagement?
In-app advertising is one way to address the monetisation issue. App owners get paid based on how many impressions the ads generate. This is an easy way to make money from apps, especially if the app is regularly used, though it might not always work for app developers. Regardless of how useful an app is, a good app doesn’t always translate into good engagement. Take for example the humble calculator app. We all have one on our phones that we will never delete but probably only use once in a while. Implementing in-app adverts into this will probably not generate enough engagement to yield decent revenue, while also hindering a great user experience. This is because while users might never delete the app, they also rarely use it enough to generate significant income.
There is also the option of selling anonymous user data to third parties. App owners have access to a lot of interesting data that offers insight into user behaviour and trends which can be translated into business intelligence. The only potential issue here is that of privacy and whether or not users are aware that their data is being used in this way. However, this can be easily solved by adopting an opt-in approach where users agree beforehand for their data to be used in this way.
The final option that is gaining traction is the inclusion of an SDK that enables a variety of secondary functionalities. For example, app owners can add a caller ID SDK to their app which will let users know who is calling even if the contact is not saved on their phone. The call summary page, which appears at the end of the call, serves as an advertising platform where ads are served every time user make or receive a call. Revenue is generated whether or not the app is opened and the secondary functionality does not interfere with anything else users want to do. SDKs can also enable re-engagement by including a subtle link back to the app. Apps like Simple Notepad and Mega Voice Changer have seen more than 10-fold ad revenue within one month after integrating a secondary functionality to their app.
In 2012, Google Play Store had 600,000 apps. Today it has 2.8 million. With this growth, we are seeing increased complexities in how the market works. The market is moving at such a rate that developers and app owners cannot afford to rest on their laurels and only the well-equipped will reap the dividends of the ongoing growth.
