Old myths die hard, and one of the biggest myths that our mobile phone and mobile app industries need to debunk is that it is much harder to make money with an Android app versus an iOS app. Let’s discuss the roots of this app monetization myth and how developers can actually drive phenomenal revenue and profit from their Android apps. As mobile apps become a more important part of many company’s monetization strategies, getting the most revenue from them – whether via the Google Play app store or via direct sales, is absolutely critical for business success.
Historically, it was certainly true that earning money with iOS apps were more profitable than making money with Android apps. In 2011 for example, Piper Jaffray estimated for Wired that 85-90% of app store sales went to Apple’s App Store. Apps on Android phones drove less engagement and far fewer transactions back then. In that year, the iOS App Store provided developers with $3.4 billion in revenues, while the Android Market delivered only $240 million to its developers.
But 2011 was a long time again when it comes to the mobile app business. A long time ago. So why do so many people believe that Android device apps are much harder to monetize than iPhone apps? I think that the perception that revenue is still lower from Android apps relates to five things:
- iOS/iphone mobile apps had a big head start. In the early days of Android apps and app development, the Android OS platform was competing with the already more established iOS market and platform. Android was simply playing catchup, learning what works in this incredibly dynamic marketplace.
- Disparate Screens and Phone Capabilities: In addition, the remarkably open nature of Android meant that mobile app makers had to consider a far broader range of devices and constraints in their development. Some Android developers found it more difficult to develop an app using the Android SDK because of the tremendous range of devices and concomitant capabilities.
- Ported versus Purpose-Built Apps: Many of the major apps in the early days of Android were ported versions of iPhone apps. For app developers, porting apps to Android phones or Android tablets can bring with it specific issues that limit success.
- Google Play Footprint and App Store Maturity: At the time these rumors began, there were a lot more iPhones out there than Android devices. Also, the Apple App Store had lots more experience and testing to help optimize its user flow.
- Android and Android App Usability Challenges: Especially in the beginning, iPhones were just plain easier to use and transact on. They were simply more usable mobile devices.
Making Money with Android Apps: The Sea Change
Several years on, however, these factors are no longer true. Perhaps the biggest marketplace change is that Android now dominates in OS market share, with more than 80% worldwide, according to BI Intelligence.
In addition, Android smartphones have largely converged in terms of capabilities and screen sizes. While there remains a range of characteristics, that range is rather smaller than just a few years ago. That makes the Android market for homogeneous and easier to develop for.
Finally, because Android devices dominate in so many markets, many apps are developed and optimized to Android first. Android app experiences have improved markedly. Mobile retail experiences, in particular, have gotten a great deal stronger.
This article from re/code says that the tides have turned as regards making money on Android versus iOS. From the piece:
But now quantity is giving Google a boost. The massive number of Android devices is finally starting to make Android a more significant revenue generator than the iPhone. Each individual iPhone is still more lucrative than a single Android device for app makers, but the overall size of the Android market is starting to be large enough to overcome the per-device difference.
Two recent studies suggest the Android ecosystem has started to overtake the one surrounding the iPhone. Opera Mediaworks, for example, found that in the first quarter of 2015 Android generated 45.8 percent of ad revenue compared with 45.4 percent for iOS — the first time Google outperformed Apple. Digi-Capital, meanwhile, says that when China is included, Android stores generated more revenue overall than Apple’s App Store last year.
Note, though that these figures are for IAP (In-App Purchases) which tend to be for virtual goods, versus retail sales figures for tangible goods. When retail is factored in, Android definitely leads the way globally.
Enough of the windup. What ARE the key elements of a strategy to make money on Android apps? Consider the following:
1) Make 1,oo0% sure that the value is there.
Part of the reason why so many apps fail is that so many apps…well…suck. Make sure you have an app with a realistic chance for adoption and success. In apps, utility is jobs 1, 2 and 3. Where the best apps succeed is in giving the user valuable benefits they cannot get any other way. Further, you need to be able to articulate the value of your app quickly and succinctly. It needs to be immediately apparent to the prospect why they need to incorporate this app into their life.
2) Sweat the UI and UE Details
Think through your revenue model carefully.
When it comes to app monetization strategy, there are a number of ways to drive revenue from an app. The three most common are:
- Charging for the app
- Enabling in-app purchases (IAPs)
- Paid advertising
In fact, many apps seek multiple app monetization streams in order to generate more money. That can be a very sensible strategy. But ensure your goals and financials are realistic. A report from App Annie also shows that the most successful revenue models can vary by country. If you are considering a paid app, know this: paid apps generate a relatively small portion of total revenue for the industry in most countries. Most people prefer fremium or free apps (ad supported). That doesn’t mean you shouldn’t charge for their apps but rather that they need to reflect this reality in your planning and revenue estimates. A final thought here: if you develop your app with multiple revenue streams, you can capitalize on the best monetization models for each country as you expand internationally. By having both advertising and IAPs built into your app, you can more easily adapt to the preferences in each market.
3) Know that Android app marketing is all about sustained support
So much of the conventional wisdom among app developers about apps is hype-focused. That you need to create a frenzy at launch, like you do with movie marketing. No doubt about it, a great start is important, especially so in gaming. But we also need to recognize the very real challenge of user decay, by which I mean that your biggest challenge is keeping people engaged once they’ve installed. Uninstall rates can be almost 30% in the first HOUR of having an app. If you make it past the hour, you must meet the challenge of getting people over the hurdles to routinized usage – relaunches, engagement, firs transactions and repeat transactions. The best results come from when a company uses push notifications, emails, and retargeted advertising to reach and persuade.
4) Take a data-driven approach to app marketing
Make sure that you have the all the data you need to understand your marketing performance and how your customers interact with your app. While the tools for app measurement are different than those for the PC web, it’s possible to get the same degree of quantitative insight for apps as you have for your web-based initiatives. Our team would be pleased to tell you more about what we offer in this area.
5) Invest in your app store presence
Make sure you spend enough time making your app store presences as strong as you possibly can. That means all of them, not just the App Store. Use Google AdWords tools (set to Mobile) to identify the most popular search terms in your category. Describe your app based on what it does for the user. Include exciting and appealing screen shots; you’d be amazed how many brands shoot themselves in the foot with blurry low-res ones. And test test test! A/B testing solutions are now available at great prices to ensure you get maximum bang for your buck.
6) Deliver an integrated and sustained free and earned media program
Paid media have become a critical part of app marketing. Set concrete, quantifiable goals for reach, frequency and engagement. Create a mobile-friendly web presence for your app. Promote your app on your site and in as many other brand touchpoints as you can. Print the App Store and Google Play urls on packaging, signage, shopping bags and anything else that touches the consumer. Incorporate your app message and links into your social media presences. You can get a massive boost in impressions, engagement, and awareness from all the extra touchpoints.
7) Focus on quality installs
Don’t focus on vanity metrics like daily install counts. Instead, concentrate on reaching and persuading quality users to install. What constitutes “quality” will depend on your objectives. A quality user might by someone who makes regular purchases, or who returns to your app frequently, or who helps drive others to install. If you evaluate marketing options based upon the extent to which they drive quality installs, you’ll be a lot more likely to nail your goals.
8) Consider featuring your app in specialty stores
While Google Play and the Apple App Store are the largest libraries of available apps, it may also make sense to feature the Android version of your app in other specialty app stores. While all iPhone apps must be installed from the App Store, Android allows apps to be downloaded from other locations online. Do some searches for specialty stores that attract your target audience or are relevant to your category. But be careful to get the data you need to monitor for APK fraud.
9) Measure and optimize your install process
Many people abandon installation mid-process for experiential reasons like when the app offers no social-ID-based registration process, offers only social-ID-based registration, uses long forms and requests unnecessary or unrelated info, and reg page performance issues. Define what you need to know versus what you might want to know. Also, be sure and request permission to deliver push notifications during that first app launch — about half of users typically consent, and push messages represent a very powerful and low-cost way to drive app re-engagement.
10) Architect a post-install communications plan for your app to fight user decay
Recent data show that an astounding two-thirds of app users uninstall in the first 30 days. Your best defense against uninstalls and user neglect is to drive revisits in those critical first days and weeks. Apps that are launched on multiple occasions in the first days and weeks post-install are far more likely to remain on a device and become regular parts of a user’s daily routine. Use email. Push. Message centers. Advertising. And analyze your behavior and response data to optimize your program.
11) Personalize your user communications for maximum results
All users are not the same. Identify high-performing audiences for retargeting and re-engagement. Focus your remarketing on the levers that will best impact your KPIs. If you are focused on app revenue, identify and message target groups like shopping cart abandoners, lapsed users, and heavy buyers. If you are offering more of a companion app, concentrate re-engagement efforts on getting users to relaunch again and again.
Ultimately, the principles for making money in Android aren’t all that different from on iOS. But I’d argue that, when it comes to making money on android apps, doing more of the right things is key to making money in Android.