by Dale Carr founder and CEO of LeadBolt
No secret here, the mobile app industry is exploding. It’s now commonplace for people to use apps to accomplish everything from banking to gaming. There is literally an app for everything. Gartner predicts that global apps revenues will reach $26 billion (£16.1 billion) this year, up 44.4 per cent on 2012′s $18 billion, with free (or freemium) apps continuing to drive the market. An astounding 91 per cent of app downloads will be free this year, while in-app purchases will account for 17 per cent of revenues. By 2017, annual app downloads are expected to reach 268.7 billion, by which point 94.5 per cent of app downloads will be free, and in-app purchases will be generating 48 per cent of revenues.
With the free app economy growing at record pace, mobile users are accepting in-app advertising as the price for free content.
In fact, 85 per cent are willing to view ad-supported content vs. paying for content, according to the 2013 Adobe consumer mobile survey.
With this acceptance, however, comes big responsibility for app marketers to protect the user experience and even delight and engage the end user, while devising ways to get their money back.
For app marketers, preserving the integrity of the mobile app experience and generating revenue is a delicate balance.
Understanding the new considerations and trends of mobile app marketing will help developers and marketers stay successful in the free app economy.
Rule of quality over quantity
More is more, right? Not these days. The old way of thinking was to focus on achieving scale, attracting large quantities of users only to be disappointed by attrition or one-time usage – app marketers should focus instead on attracting high quality, engaged users.
Installs (aka downloads) are important, but they are not the only performance metric that matters. Mobile marketers should pay attention to and track what users are doing beyond the install.
For example, identify particular qualities and behaviors of your users, in order to move them further down the marketing funnel.
Let’s say a user only got half way through the app, but didn’t make a purchase – look for opportunities to re-engage them, bring them back to the app and get them to buy.
Get smarter about how to invest campaign dollars. It’s important to test campaigns, iterate and optimise.
Understand what works and is relevant and meaningful to users and then scale that formula, versus disrupting a user with an irrelevant message or wasting dollars on an unproven method.
Plan ahead. Keep an eye on trends for what’s next in 2014
Brands are becoming more integrated within apps to create a natural extension of the app itself.
To promote a game inside another game app, for example, a ‘more game’ recommendation button lures gamers to the new game app.
Ad formats that behave as a game or include a novel experience like a ‘shake’ trigger are capturing user engagement and will continue to outperform traditional ad banners.
Also, branded avatars and uniquely branded backgrounds are gaining popularity. Think sponsored playlists for music apps.
App marketers should keep an eye on Android growth, particularly in growing markets such as Asia.
While some mobile app developers report that monetisation can be higher on the iOS platform, acquiring those users can also cost more.
With the introduction of higher end devices and Google tablets having inspired developers and advertisers, the opportunities on Android are growing rapidly.
‘Native’ advertising environments such as Facebook, Twitter and Instagram clearly have massive amounts of users.
For now, these environments are ‘closed’ to ad networks, but the industry is hopeful to eventually be allowed access.
We at LeadBolt believe the free app economy is the way of the present and future.
The sooner mobile marketers understand and respect the new playbook for advertising to users, the more successful they will be, and in turn the more free apps we will all be able to enjoy.
Dale Carr, founder and CEO of LeadBolt is a recognized expert and leader in the technology, mobile and digital advertising industries. Having spent close to a decade in the digital and mobile marketing industry, Carr foresaw the explosion of mobile apps, while also realising that the existing mobile advertising ecosystem was merely transitioning standard web advertising onto a smaller screen. Dale was recently named Ernst & Young’s Australian Entrepreneur of the Year for Technology , and won the Australian Prime Minister’s Exporter of the Year in the information and communication category.