How Much Do Average Apps Make?

Great post written by Tristan Louis, of Forbes

August 10, 2013

http://www.forbes.com/sites/tristanlouis/2013/08/10/how-much-do-average-apps-make/?

How Much Do Average Apps Make?

iOS, Android, and Microsoft are all trying to gobble up developers

iOS, Android, and Microsoft are all trying to gobble up developers

The last few years have seen an unprecedented number of people rushing to develop mobile apps for iOS and Android. But looking at the installed user base on each platform and information on the payouts made by the different companies, it appears that the vast majority of developers will find themselves with little revenue to show for.

 

The consensus around the industry is that Google dominates the mobile market with 900 million users, while Apple follows with 600 million iOS devices purchased, and Microsoft comes in third place with an estimated 12 million Windows Phones sold (the vast majority of those, 81%, being sold byNokia NOK +0.24%).

With different forums aimed at attracting developers, each company handles announcing the size of their markets differently.

Apple, at its WorldWide Developer Conference, talked about 1.25 million apps in the app store accounting for 50 billion downloads and $5 billion paid off to developers in the last year. To the company, it is a sign of pride to be able to pay this developer community. Internal data from the app store, gathered from sources close to the company, indicate that the numbers are in line with the actual payments made to developers.

At Google I/O, the largest Android developer conference, Google touted 150,000 developers responsible for over 800,000 apps. While the company does not break out revenue numbers on their apps, recent data in their financial filings seemed to indicate somewhere around $900 million in pay-outs to developers “over the last 12 months” and discussions with external research analysts put the number of downloaded apps from the Google Play store at around 48 billion, close to what Apple has claimed.

Microsoft, meanwhile, has been claiming 160,000 apps in their store from 45,000 developers. In a recent interview, Microsoft officials claimed that the average user downloaded 54 apps, which would put their download count at 650 million to date. While the company does not break out data for its mobile division, looking at the variations in the accounts payable line of their 10-Qs over the last few quarters before and after they introduced their app store shows a variation of up to $100 million since 2011 that could be attributed to the app store.

So taking all that data into account, we can summarize it as follows:

Looking at this, it is clear that Apple is winning the game in terms of total number of apps and money paid to developers. But lost in the shuffle is how much money developers can actually make on those platforms.

Meager dollars per download

Taking the data in front of us, we can get a sense of how many apps the average developer creates and what kind of revenue a developer can expect from those apps, on average (granted, power laws dictate that a small number of developers will do extremely well while the vast majority will fail, but we’re trying to look at averages here).

Based on this, the average developer on those platforms is pretty busy, developing 3 to 5 apps depending on the platform. Interestingly, Android is the big winner on downloads for a given app but this is largely offset by substantially lower revenue, with the average app download bringing in around 2 cents to its developer; Apple fairs 5 times better, bringing in a dime for every one of the 40,000 potential app downloads a developer could strive for. But the interesting thing is that Microsoft’s platform may be substantially more rewarding for its developers, bringing in $.15 per download (a fact that is offset by download numbers shown to be only 10 percent of what the other platforms can offer).

With the average paid app retailing for $.99, what we see here is the direct impact of free apps on those marketplaces. Android’s substantial lead in offering free apps cuts deeply into the average revenue paid out to developers while the smaller availability of free apps on the Windows platform may work to its advantage.

But what does that mean in terms of actually revenue?

Impact on developers’ wallets

Multiplying the average revenue per app by its average number of downloads, we can get a sense as to what an average developer can expect to make on an app today. Taking the same number and multiplying it by the number of apps an average developer creates, we get a sense of the revenues one can pull from going that way:

What we see here is that while decent amounts of money can be made on an app, a hard-working developer on iOS will be able to get a new car, while Android and Microsoft developers will be forced into the used car market if they plan to take those earnings on the road. At $4,000 in average revenue per app, Apple has a lead but it still begs the question as to how many developers can actually make a living directly from apps on any platform. Direct revenue from the apps themselves may not be able to justify large development teams but other revenue sources (advertising, for example) may help developers increase their take.

Of course, these are average values and many hope to find the next big hit, the one that will be on the higher end of the median. But for every app that goes north of those numbers, the average for the remaining apps drop.

Where are the opportunities?

There is, however, some hope. While Apple has developed a rich market for developers, Google and Microsoft both have opportunities to improve. For Google, the focus should be on improving the numbers by helping developers monetize their apps so they can come more in line with what Apple can offer. Even if they only reached half of what Apple does in terms of revenue per download, they would be able to match the revenue developers make. For Microsoft, the story is all about the number of users. If they were to manage their average revenue per app while growing their user base, they could potentially out-earn all the other platforms.

In all three cases, however, there is much work to be done to increase monetization of free apps. And that may be the next growth opportunity for any developer as it presents an opportunity that is substantially larger than the existing one.

Every app developer hopes to build the next big hit but, as is the case for any hit-driven market, a large group will be left behind with little to show for their efforts. At the end of the day, the model for mobile apps is no different than any other of the past: whether it is gold in the Yukon, websites in the 1990s, or app developers today, larger amounts of revenue will go to those who enable development than to those who are doing the development. Levi Strauss made his fortune selling picks and shovels to gold prospectors; Adobe, Amazon, and Google made theirs enabling web developers; and as the mobile revolution takes hold, some new players will emerge providing tools to create apps and those may be the biggest winners.

TIP: Facebook Ads are Small but Mighty

Facebook ads are small but impactful. You have 25 characters to play around with for the title and 135 for the body. Don’t use ALL caps or all small letters in your ad. Use a relevant and compelling picture and above all have a call to action. Remember you can always say more on the destination page, this ad’s focus should be to get them there.

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Every Tuesday App Promo will be providing tips on app marketing and promoting applications based on their experience leading marketing campaigns for applications across platform. These tips are like regular marketing vitamins aimed to boost discovery and visibility for app publishers to better succeed in the business of their apps.

ShanaTova App 5774 – A great way to celebrate Rosh Hashanah

App-Promo is proud to see our client’s application @Shanatovaapp application (www.bit.ly/shanatovaapp) get such great reviews and feedback. The marketing campaign, focused on social media (Twitter and Facebook) has been extremely successful and demonstrates the power of  social media marketing for mobile applications.

Shanatovaapp

TIP: Use Your Network to Exchange Ad Space

If you have a network of friends and colleagues who are also app owners work with them to advertise your apps within eachother’s app. Offer them ad space or a featured area in your app (like the loading screen, About page or even an article if your app is contetn based) in return for the same.

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Every Tuesday App Promo will be providing tips on app marketing and promoting applications based on their experience leading marketing campaigns for applications across platform. These tips are like regular marketing vitamins aimed to boost discovery and visibility for app publishers to better succeed in the business of their apps.

The Power of An App Icon

ASO 5-Part Series: Part 3 – Icon 

If a picture is worth a thousand words then your app icon is worth more than any other asset for you mobile application. Your app icon is the most evident element of your branding both on the home screen of the users device and in the app store where they make the decision to download.

Users are making app purchase decisions based on icons similar to how they often judge a book by its cover. With mobile download behavior being very impulsive it is extremely important to be able to stand out from the crowd and convey as much about your app as possible in an instant.

How compelling and clear your app icon is for a user will help with conversion to download and may also play into the decision making process for a user to consider which app to open from the device home screen – impacting then both your downloads and usage.

It’s for this reason that App Store Optimization exercises tackle the quality and effectiveness of your app icon.

The first step is to look to your competitors. Go to the App Store and search for other apps similar to yours in the App Store. Take note of the colors, the design, the style and the characters or icons that they are using and make a list of these to inspire your deisgn.

It’s best to keep your app iconic. Avoid being overly wordy. In fact avoid words at all. Using objects, symbols or letters is best to achieve a clear and easy to digest icon. Consumers should see your icon and be able to identify the imagery you are illustrating. But beyond recognition, they should get a sense as to what your app is all about or what type of app you are providing from your icon.

Keep your design simple. Clean, high quality icons will present your brand and product as a professional offering in the marketplace. As real estate in an icon is at a minimum you want to avoid cluttering your icon that will only confuse or frustrate consumers.

Don’t be afraid to be different or bold, remember you want to draw attention to your app amongst a sea of applications in the storefront. Use strong colors. Choose imagery that conveys a mood, tone or emotion indicative to your app’s purpose.

Give yourself choices by creating a couple of concepts for your icon before selecting the one that you will go forward with. Socialize your concepts with colleagues, business partners, family and friends and get their honest feedback. Getting an outside opinion is extremely important seeing that this icon is being created for your audience’s attention and not your own, so be sure not to skip this step.

Be open to any feedback you may receive regarding your app design – good or bad. Being overly committed to your app icon too early on could blind you to some much needed opportunities to make your app better. It’s never too late to make changes or start over. Since icons are what users will look for to identify their app on their home screen, icons are rarely changed, so you will want to make sure you get it right the first time.

If you are not a designer and have the budget, seek professional help. Find a graphic designer who can help walk you through their process. A good graphic designer will meet with you to discover what your business is all about, who you are, what your app’s objectives are and what existing ideas or brand elements you may have already accomplished. Be sure to select a designer you trust. You will want to rely on them completely as your counsel in this field and in some instances you may not see eye-to-eye so someone you know is an expert in their field will be necessary.

Regardless of what you do when it comes to your optimizing your app icon, make sure it is not an after thought. It may be small, but this icon could make or break the success of your app in the marketplace.

TIP: Switch Up Your Facebook Ads to Keep Interaction High

Facebook ads are a great way to reach your demographic but they are thought to have a quick shelf life of 3-5 days before they drop in interaction. If you plan on running ads longer than this period, consider switching up the creative and your messaging. This should help increase your chance of interaction for another cycle.

——
Every Tuesday App Promo will be providing tips on app marketing and promoting applications based on their experience leading marketing campaigns for applications across platform. These tips are like regular marketing vitamins aimed to boost discovery and visibility for app publishers to better succeed in the business of their apps.

TIP: Set-up Ads to Convert Users

When purchasing any paid media it is extremely important to have a converting landing page to send the user to. Avoid linking ads to the homepage of your marketing or company site. Send them directly to a call to action, which in this case will most likely be to download the app.

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Every Tuesday App Promo will be providing tips on app marketing and promoting applications based on their experience leading marketing campaigns for applications across platform. These tips are like regular marketing vitamins aimed to boost discovery and visibility for app publishers to better succeed in the business of their apps.

Meet the new Canadian Family – The Mobile Hockey Mom, The Digital Dad and The Young and Wireless.

MobilePersonas

Insights on Key Mobile Consumer Segments in Canada to be discussed at launch event of research report in Toronto on July 25th, 2013 at TIFF Bell Lightbox.

Toronto, Ontario (July 8, 2013)- As mobile becomes an increasingly important part of everyday life for Canadians, there is a much greater need for advertisers, publishers and brands to gain Canadian specific insights into those who use mobile.  In response to this need, App-Promo, BrandSpark International and Tapped Mobile have partnered to conduct a detailed research study on the mobile habits of three key Canadian personas: Mobile Moms-The Hockey Mom, Digital Dudes-The Digital Dad, and Millennials-The Young and Wireless. The research looks at how these demographics use their devices and which channels are the most effective for reaching them. The study also provides key insights on how these demographics can be accurately targeted by brands and agencies.

“Through the Canadian Mobile Persona study, marketers, brands, publishers and agencies will be able to better understand how mobile is used as a media channel and how to use it as a platform to reach and engage with their target audience(s)” agreed Gary Yentin, CEO of App-Promo, Mark Baltazar, Vice President of BrandSpark International, and Jed Schneiderman, President of Tapped Mobile, the three partners behind this research report.

The complete study is available in a comprehensive report that will be available July 25th, 2013 covering insights for each key segment:

◦    How these Canadian personas use their mobile devices and why it matters to marketers

◦    The behavioral and attitudinal differences between smartphone and tablet usage

◦    The key differences between iOS and Android users that will impact your marketing plan

◦    The type of apps you should be advertising on to reach your target market

◦    The role of mobile for shopping along the path to purchase

Insights from this study will be presented at a launch in Toronto on July 25th, 2013 at TIFF Bell Lightbox from 9:30am-11:30am. The event is by invitation only and limited to the to the first 150 participants.  More information can be found at the website www. mobilepersonas.com

For Further information and all other media contacts:

Gary Yentin
gary@app-promo.com
@Apppromo

 

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