MoPub, a real-time bidding exchange for mobile advertising, recently published a report on their marketplace for the third quarter which shows some strong trends. The effective cost per thousand impressions (eCPM) was steady or rising across platforms through the last quarter. Android eCPM was rising much faster than for iOS. This is in sharp contrast to the rather dramatic decline in eCPM for smartphones between Q2 and Q3 evident in Opera’s reports, with Android falling faster than iOS.
In a recent post on the app localization opportunity we highlighted the potential for targeting growth markets in the emerging world. Not all apps are equally suited to doing so though. For some high-profile apps such as Facebook, Google Maps or Angry Birds the demand is global and these apps easily penetrate local markets. For other apps — like a taxi booking, cinema schedules or restaurant reservation apps — what works with US consumers will not work in the local business environment or culture in a European or Asian city. Different language, culture, business environment, promotional channels, regulations, brands and local consumer behaviour will mean that many apps will need adaptation to penetrate local markets. It also means that much local app demand is currently undersupplied. China, Brazil and Russia are good examples of major markets that are hard to penetrate, yet present major opportunities for mobile app developers globally. We believe that in the app economy, global demand for top-seller apps will dominate downloads in most regions. At the same time, regional demand for localised apps will drive the production of the next 10 million apps.
Android has long since passed iOS in terms of sales, installed base and even app downloads, while total number of apps available is now about level. Despite this app revenues for iOS developers have remained consistently higher. Is that about to change?
App Annie Intelligence, which tracks more than 700,000 apps, reports that freemium apps – free apps that have in-app purchases – are experiencing impressive revenue growth worldwide, far outpacing premium apps in both iOS and Google Play stores. Over the last 24 months, worldwide revenues for freemium apps on iOS have more than quadrupled. In 2012, worldwide revenues on Google Play have grown 3.5X. Now, apps generate 69 percent of the worldwide iOS app revenue and 75 percent of global Android app revenues. Meanwhile, premium revenues for both app stores remained relatively flat in these time periods.
This confirms earlier reports of this trend by Distimo, IHS iSuppli and others.
From TechCrunch:
App measurement and ad company Flurry has revealed significant traction for its iOS and Android app advertising and targeting platform, AppSpot. The platform was made publicly available in October 2012 and has attracted more than 1,000 app publishers to sign up in just over three weeks, according to the company. Flurry described revenue performance of the first 500 applications already live as “very strong”, with an average eCPM of $5.80 across interstitial, video and banner ad formats.
Mobile apps are a huge and rapidly growing business. Mobile developers have access to a greater number of users and more simple ways of monetizing their creations than any software developers before them. However, selling digital content and services directly, or advertising to users of those services are only two of many, many ways of generating revenue through mobile apps. Which methods are likely to dominate in the future?
Push notifications are a popular tool for this purpose. With the vast majority of app revenue growth coming from in-app purchases rather than paid downloads, it’s more important than ever to keep users engaged with your apps. Updating users about new content or activity and driving them back to the app. At the same time the technology is controversial since unwelcome or excessive push notifications annoy users, who will either disable them or worse yet uninstall the app responsible. So is it worth the risk? Do push notifications work?
As we showed in our Developer Economics 2012 survey, there is a massive gap between the number of developers creating applications for local languages (other than English) and the demand for local language content. For many app types, app localization is only a relatively small incremental investment on top of the original app build costs and yet has the potential to generate significant new downloads and revenue. How should developers decide if it’s going to be worthwhile?
This hackpad (a collaborative list composed by 150 people) has an impressive list of web and mobile revenue models, ranging from the classic ad-driven models and pay-per-download to intermediaries and commerce models.
For Your Inspiration.
Many of the most engaging and popular apps connect to cloud services which either regularly deliver new content, enable users to interact with one another or both. Unlike a standalone application, such apps can incur ongoing hosting costs throughout their active usage life. Ideally your revenue model should mirror the cost structure. Using a Backend-as-a-Service (BaaS) reduces execution risk and time to market as well as removing server maintenance and scaling headaches, however, it typically increases the ongoing service costs making the revenue model fit even more important. Obviously the technical requirements of the app constrain the selection of service and for basic backend features Cloudspring has a good overview article. The variation in pricing of backend services is even greater than the diversity of their technical capabilities but this post will provide some generally applicable advice.