The cost to market an app soared throughout 2015 reaching all-time highs for both iOS and Android. App makers were granted a slight reprieve for both Android and iOS in November, according to the most recent indexes from Fiksu. Though the downturn was slight, it’s the first month since August in which costs dropped for both mobile platforms.
The advertising cost associated with getting a user to download an app was $1.54 for iOS in November 2015, down 10% from the month prior, but 40% higher than the $1.10 it cost in November 2014.
For Android, app install advertising costs came in at $2.27 in November, down 6% from October, but up a steep 101% from the $1.13 it cost in November 2014.
Android costs grew the most rapidly. The growth of app cost seen throughout 2015 for both iOS and Android was high in the second half of the year, particularly so for the cost of installing Android apps, which spiked and grew ahead of iOS around March 2015.
These growing costs are a byproduct of crowding app stores that make organic app discovery challenging if not impossible for many apps.
It’s unlikely costs will deflate to 2014 standards any time soon. Although Apple and Google have been attempting to make app discovery easier, there’s been no substantial solution to this issue.
It can cost $200,000 in advertising expenses to push an app into the top 25 ranks in the U.S., according to data from mobile marketing firm Fiksu.
Fiksu analyzed what it costs to reach the top ranks in the iOS app store around the world. While the U.S. is the most expensive, it costs only $15,000 to hit the top 25 ranks in Canada.
Meanwhile, it costs $65,000 for Germany; $45,000 for the United Kingdom, $30,000 for France; $10,000 for Thailand; and $35,000 for Brazil.
Tom Cummings, director, account management at Fiksu, said in a statement, “Visibility in the iOS App Store is a great way to get more organic downloads — but climbing the ranks can be hard. Paid app promotion to generate downloads can help propel you to the top of the charts – but cracking the top 25 overall free apps in the U.S. is an expensive proposition. We’ve calculated what it takes to get to the most visible ranks in App Stores around the globe and complied the results to give you some alternatives to the pricey U.S. market. While the U.S. App Store remains the most lucrative, marketers with the option of promoting in other countries should at least consider app marketing that takes advantage of much lower costs to get top 25 visibility or better.”
The vast majority of apps in the Google Play store are rarely installed, according to a new report by the Pew Research Center. The report analyzed over 1 million apps in Google’s Android operating system in 2014 to determine the quantity and nature of permissions that programs request from users.
The report’s data on installs illustrates just how lopsided Google’s app store has become. It also points to just how difficult it is for developers to promote new apps.
Nearly half (47%) of all apps available in the store during the period of the study had been installed fewer than 500 times, and more than 90% had been installed fewer than 50,000 times.
At the same time, a small group of highly visible apps are installed by vast numbers of users. Four apps were installed between 1 billion and 5 billion times during the period examined
— Google Maps, Gmail, Google Play Services, and YouTube. It is important to note that these apps come preloaded on Android devices.
Facebook, Google Play Books, Google+, Google Search, Google Text-to-Speech, Google Street View, and WhatsApp were in the next group of apps installed in the 500 million-1 billion download range.
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Apple’s App Store will reach nearly $30 billion in annual revenue by 2021, a Strategy Analytics report predicts (click image to enlarge), with content players benefiting from a growth in subscription services.
By the end of the forecast period, the iOS company will have paid out more than $140 billion to app developers.
Currently, 80 per cent of revenue is made by virtual goods and in-app purchases, with game companies dominating.
In the future, content owners such as Netflix, Hulu and Spotify will see “exponential revenue growth” fueled by in-app subscription sign-ups.
In many emerging markets, users will have access to such services for the first time through their Apple devices, the report noted, adding that when Netflix recently allowed in-app sign-up for its service, it climbed the ranks of the highest grossing entertainment apps in more than 20 countries.
Joshua Martin, chief evangelist of apps research for Strategy Analytics, explained that “the ascent of Netflix to the top within days is a testament to the power of apps and iOS. Simply by enabling a feature Netflix found a new universe of users”.
“The stickiness of subscription services such as Netflix will see content owners sit atop the highest grossing entertainment apps and, in the long term, amongst the highest grossing apps overall globally,” he added.
Martin also said that “in-app purchase will still drive billions in revenue each year, but the growth of subscription and consolidation among key players is a key trend that will drive future growth for the App Store, Apple, and content owners”.
New devices such as Apple TV and the Apple Watch will account for a small percentage of downloads but will extend app capabilities.
Ahead of the holiday shopping season, Apple breaks out e-commerce apps into its own category on the App Store.
Ahead of the holiday shopping season, Apple is adding a new category in its App Store that will allow people to find e-commerce apps more easily.
Apple iPhone and iPad users will now see a dedicated Shopping app in the list of categories of apps in the App Store. Previously, shopping apps were a segment of the lifestyle section of the store. With the shopping category, Apple AAPL-0.24% will now have 25 different categories of apps.
The channel will officially debut Nov. 5, in time for the holiday shopping season and China’s version of Black Friday—Singles Day, which takes place on Nov. 11.
Apple said that breaking out the channel made sense as the sector is popular among its users, especially as mobile shopping becomes more ubiquitous. The majority of global e-commerce traffic is increasingly coming from smartphones and tablets instead of from personal computers.
According to Yahoo-owned app analytics service Flurry, the use of mobile shopping apps grew at over 174% in 2014, which was faster than any other app category that year. And 54% of holiday shoppers said they plan to shop on their smartphones this season, reported a recent Google survey.
The apps that will be included in the new category will include e-commerce apps like Amazon AMZN0.73%and Walmart, auction and marketplace apps like eBay, coupon apps like Groupon, price comparison apps, and product review apps.
The new shopping category will also include apps that include the ability to pay for items using Apple’s mobile payments technology, Apple Pay. Launched in 2014, Apple Pay lets users upload credit and debit card information to a “mobile wallet.” They can then use their iPhone or Apple Watch to pay for goods at retail stores in the U.S. and U.K. that have point-of-sale registers equipped with near field communication technology, known as NFC. Users can also use their accounts to pay for items within apps, if an app developer has Apple Pay integrated. Apps that include that ability to pay with Apple Pay include Target, Airbnb, Uber, and Amazon.
In the past year, Apple hasn’t revealed much in terms of how many people are using its payments service, but the company teased a few usage stats with Monday’s news. Jennifer Bailey, vice president of Apple Pay, says that thousands of apps have integrated the company’s mobile payments technology. (She also revealed that usage of Apple Pay by iOS users is growing month over month at double digit rates but declined to give exact numbers.) She adds that Apple saw additional usage growth after the release of new devices in September, including the iPhone 6S, that include the mobile wallet technology.
Bailey cited the success of food chain Panera Bread, which started accepting Apple Pay in stores and within its mobile app in 2014. Bailey said that 20% of all of Panera’s transactions from customers are now coming from Apple Pay.
For many app developers, integrating Apple Pay has encouraged users to spend more on mobile and online storefronts because it saves the time and effort for entering credit card and shipping information, says Bailey.
Alan Tisch, the CEO of mobile shopping app Spring, says that Apple Pay is helping more customers complete their checkout within the app. He explains that using Apple Pay to pay for items on Spring cuts first time checkout by over 50%. Also, he says that customers who use Apple Pay are more likely to checkout than those who are not. Spring also has integrated Google’s GOOG-0.81% similar technology, Android Pay, in its Android app but Tisch says it’s too early to share conversion rates.
App developers are also excited that Apple is finally showcasing shopping apps in a standalone section. Ryan McIntyre, a marketing head for JackThreads, a shopping app for menswear, says that many consumers find the app through searching the App Store. He expects the new category and promotion of shopping apps to help more customers discover JackThreads, especially as more people are looking to shop on their mobile phones during the holiday season.
Bell Canada has agreed to pay a $1.25-million penalty after the Competition Bureau learned that employees were downloading the company’s free apps and providing them with stellar ratings
Bell Canada has agreed to pay a $1.25-million penalty after the Competition Bureau learned that employees of the telecommunications giant had been downloading the company’s free apps and providing them with stellar reviews without disclosing their relationship to the company.
In addition to paying the “administrative monetary penalty” or AMP, Bell Canada has agreed to “enhance and maintain its corporate compliance program, with a specific focus on prohibiting the rating, ranking or reviewing of apps in app stores by employees and contractors.”
Bell Canada will also sponsor a workshop that will examined “Canadians’ trust in the digital economy, including the integrity of online reviews,” according to the consent agreement registered with the Competition Tribunal released Wednesday.
“I am pleased that Bell Canada demonstrated leadership to fully resolve the Competition Bureau’s concerns in this matter,” said John Pecman, Commissioner of Competition. “I commend the shared compliance approach taken by Bell to resolve this matter, which will benefit both consumers and the digital marketplace.”
According to the Competition Bureau, in November 2014, Bell employees were encouraged to download two free apps, MyBell Mobile and Virgin My Account, from the Apple iTunes App Store and the Google Play Store. The apps allow Bell customers to control their accounts directly from their mobile devices. The employees were then encouraged to post positive reviews and ratings of the apps without disclosing that they work for Bell.
The Bureau said Bell had the reviews and ratings removed as soon as it became aware of the situation in December 2014. “Nevertheless, the Bureau determined that these reviews and ratings created the general impression that they were made by independent and impartial consumers and temporarily affected the overall star rating for the apps.”
Affleck Greene McMurtry LLP, a Toronto law firm that does a lot of work in Competition Law, reviewed the consent agreement — and gave it no stars. “A 10-month investigation and a $1.25-million fine seems disproportionate to Bell’s conduct, which involved its employees posting reviews of account management applications that are given away for free, and are only useful to existing Bell customers. No one was duped into paying money for a product that didn’t perform as advertised. We rate this one zero stars.”
Operator Bell Canada will not “direct, encourage or incentivise” employees or contractors to rate, rank or review its mobile apps, after a probe by the country’s Competition Bureau.
The watchdog said that in November 2014, “certain Bell employees” were encouraged to post positive reviews and ratings for the MyBell Mobile and Virgin My Account apps on the App Store and Google Play, without revealing they worked for the company.
Acknowledging that Bell acted quickly when made aware of the issue, the Competition Bureau said that “these reviews and ratings created the general impression that they were made by independent and impartial consumers and temporarily affected the overall star ratings for the apps”.
In addition to focusing on its corporate compliance programme and an “administrative monetary penalty” of CAD1.25 million, Bell will also sponsor and host a workshop to “promote, discuss and enhance Canadians’ trust in the digital economy, including the integrity of online reviews”.
Firms take their data-driven marketing approach to the highly visual platform
By
MIKE SHIELDS
Knights and Dragons game install ad on InstagramPHOTO: SCREENSHOT
When you think of Instagram, you probably think of gaming.
Ok, perhaps not, but mobile gaming companies–which are among the most aggressive advertisers in mobile and social media–are quietly starting to embrace Instagram.
Traditionally known as a platform for fashion advertisers like Michael Kors and Burberry,Instagram opened its ad platform to more brands over the summer, including global advertisers last month. Among the new advertisers to join the photo-sharing social network are mobile game developers like Supercell, Gree, CrowdStar and Kabam.
These companies–skilled in enticing mobile app users to download addictive games to their phones–are having to tweak their more overt “play now!” messaging in order to fit in with Instagram’s unique aesthetic and user base.
A Kabam game ad on InstagramPHOTO: INSTAGRAM
Take Pocket Gems, which makes games like “Episode” and “War Dragons.” According to Aland Failde, director of product marketing, the company has long been a big advertiser on Facebook, and is “very performance-driven,” he said.
That’s true for most mobile gaming companies, who are known for being heavily data-driven both in their design and their ad strategy. They are not after brand building so much as hooking ‘whales,’ or players who will download games for free but end up spending lots of money in the games on extra lives, game options and access to special levels.
As such, mobile games are often known for being flashy–if not altogether garish–less the kind of images that might look appealing next to a warmly lit shot of an organic brunch.
But while Facebook has a history of being a place people play social games, “Instagram is fundamentally different,” said Mr. Failde. “People are there to consume content. And everyone on the platform is fundamentally a content creator. You have to come at if from a different angle.”
That means stepping up your creative game, said Mr. Failde. Instagram has historically been picky about the quality of its ads, particularly before it opened its business up to the masses. When Mr. Failde’s team started considering running Instagram ads in July, Instagram supplied Pocket Gems with “one of the biggest ad guidebooks I’ve ever seen,” he said.
So far though, Instagram is performing well for Pocket Gems, he said. “We’re definitely seeing positive return,” he said. One key learning to date: rather than pushing the competitive gaming aspects on prospective users, Pocket Gems found more success showcase a character kissing a prince in an ad.
Gaming Maniac ad on InstagramPHOTO: SCREENSHOT
One major factor in Instagram’s favor is that, because it’s part of Facebook, advertisers have access to the same back-end ad technology systems and targeting tools they use on Facebook, explained Shawn Conly, vice president of marketing at Gree, which has advertised the game “Knights and Dragons” on Instagram. It also doesn’t hurt that Instagram is still relatively uncharted territory for game advertisers, who perhaps are benefiting from a novelty factor.
Mr. Conly agreed that Instagram required a different creative approach–the best ads should feel like Instagram content, he said. Since jumping on Instagram early, Gree says people who end up visiting its Instagram profile pages convert at a 26% rate.
In fact, during a recent heavy ad blitz on Instagram on Sept. 26, Gree was able to deliver 12.6 million ad impressions in 28 hours, he said.
ENLARGE
Game of War ad on InstagramPHOTO: THE WALL STREET JOURNAL
It’s too early to know whether Instagram can become the same kind of fertile field for app installations that Facebook is – so fertile thatthe importance of this ad category has come up on Facebook’s earnings calls. But the opportunity is large. Business Insider Intelligence estimates that the mobile app-install ad market in the U.S. will exceed $4.6 billion this year and jump to $6.8 billion by the end of 2019. Those figures include all mobile apps, not just games.
Of course, while it remains to be seen how receptive Instagram’s visuals-obsessed audience is to downloading apps like Supercell’s war-themed “Boom Beach,” some games may be tailor-made for the photo-sharing platform. Blair Ethington, senior vice president and general manager at CrowdStar, said the company has enjoyed early success advertising the game “Covet Fashion,” which lets players virtually shop for real life brands.
“If you look at Instagram, the platform works really well for fashion, and it’s a destination for our audience already,” she said.
Over the past two months, Crowdstar’s been achieving lower cost-per-install rates on Instagram than Facebook, she said, where she estimates mobile game advertisers can end up paying anywhere between $4 and $12 each time someone installs these games on their phone after seeing an ad.
CovetFashion game ad on InstagramPHOTO: COVETFASHION
Crowdstar has been spending $100,000 a day marketing the game on Instagram using custom audience targets, and plans on increasing that number significantly—while also testing video ads, Ms. Ethington added.
She agreed that Instagram requires a more deft creative touch, and that pushing game play was probably not the right approach. So Covet Fashion ads focus on visuals of outfits and eye-makeup. Her team has also been experimenting with using hashtags in its Instagram ads, such as #OOTD, or “outfit of the day.”
Ms. Ethington noted that while Instagram shows lots of promise, it’s early days. “Let’s see what happens in six months.”
It’s unclear if Apple is setting a precedent, or has only accidentally allowed the approval of a new app, known as Been Choice, into the iTunes App Store. The app claims to block advertisements not only in mobile applications, but also in native mobile apps, including Facebook and even Apple’s own News application. To make this work, Been Choice offers a combination of a content blocker for Safari and a VPN service, the latter which allows it to filter out ad traffic using deep packet inspection.
Obviously, blocking ads in native applications could be disruptive to the primary way a number of mobile application developers make money today. So while Apple may be catering to consumers’ growing disgust with invasive and disruptive online advertisements by supporting ad-blocking technology in its newly released mobile operating system, iOS 9, it seems that allowing an app like Been Choice to actually block ads in native apps – and in particular, Apple’s own News app – goes against Apple’s own best interests.
In other words, time will tell whether Apple meant to allow such a thing or whether Been Choice getting the boot from the Apple App Store is only moments away. (Apple has not yet commented.)
The app is also concerning because it hides a paid surveys operation under the hood of an app promoting data privacy, which seems like a bad fit.
The oddly named Been Choice application was created by co-founders Dave Yoon and Sang Shin, who met at McKinsey & Co. and have worked together for more than eight years. Yoon was involved with marketing and marketing insights at McKinsey, while Shin has worked in technology for two decades, mostly in finance.
Yoon explains that the motivation behind Been Choice has to do with offering users a choice between ad blocking and sharing data in order to earn rewards. That is, users are compensated when they agree to share their behavioral data with advertisers, publishers and app developers. Those rewards come in the form of cash (via PayPal) for now, but the app promises that Amazon gift cards and the option to donate earnings are planned.
The more extensive ad blocking is enabled by way of Been Choice’s VPN service. When it’s enabled for the first time, users will be prompted to install a profile on their device. If you’ve ever had to set up an iPhone to connect to your company’s network, you may be familiar with this process. When the VPN is enabled, traffic is then routed through Been Choice’s servers where it performs deep packet inspection on the content. It can then remove specific content – like ads – through pattern matching.
“While we inspect headers and the body, no user content is stored, and our filtering is done on the fly. This approach may be more familiar in its corporate form. For example, companies use deep packet inspection on their managed devices to ensure that sensitive information never leaves internal corporate networks,” explains Yoon.
This ability, the company claims, makes Been Choice the first to block ads in Facebook’s native iOS app. In addition, the app blocks ads in Pinterest, Pandora, Yahoo and the New York Times apps, among others. It also blocks sponsored posts, native ads, and pre-roll videos like those in news apps from CNN or CNBC, for example.
Surprisingly, Been Choice is also capable of blocking ads in Apple’s News app, as well:
Twitter, however, is not blocked because of its use of end-to-end encryption that makes it impossible to block ad traffic without blocking non-ad traffic.
Choice?
The team believes that users should take more control over their data-sharing behavior, in order to understand the value of that data rather than blindly offering it up in exchange for creepily targeted ads. That’s fair, but typically mainstream technology adopters are more passive when it comes to things like this.
Installing, then enabling, a Safari ad blocker is one thing, but using a VPN service to wipe out ads across apps and then toggling between “block” and “earn” modes from time to time may be asking for too much user participation. (That’s if Been Choice even gets to stick around in the App Store after Apple sees what it’s up to!)
Even for those who feel comfortable with the technology aspects to Been Choice, the app itself needs better mechanisms to turn off or on the VPN. (Currently, you have to go to Settings –> General –> VPN then click the “i” next to the Been profile and disable “Connect on Demand.”)
Meanwhile, earning rewards takes time. You need 30,000 “points” to earn $20 via PayPal. Earning is time-based, not based on ads avoided, so you can earn 1,000 points per day by leaving the VPN enabled.
“Earning” Means Giving Up Your Personal Data…Even More Than With Traditional Ads
Finally, the Earn mode also offers other ways to gain rewards that make Been Choice seem more like a paid surveys operation, or competitor to something like SwagBucks. These types of companies are focused on users exchanging information with marketers in return for rewards.
It’s also not clear how well users will understand what data Earn mode is collecting and reselling, as users tend not to read privacy policies. And according to the Been Choice Privacy Policy, the company is tapping into the data traffic to pull device info, carrier and network info, device IDs, information about apps and data usage, “content of your communications and transactions” excluding financial and e-commerce applications (!!!), and the vague “information about you.”
The company, however, says it takes “reasonable steps to remove all personally identifiable information.” HMMM.
Still, when asked if users are actually sharing more data through Earn mode than when viewing ads, Yoon admitted that’s indeed the case.
“It’s absolutely more data. And that’s what we set out to build,” he explains.
“We think if you have consent from the user, and share economics with the user, you can gather better data. But the key question is consent,” Yoon continues.
“Today, it’s muddled and compromised. It’s an implicit agreement, and neither side benefits and both sides are left wanting more. More privacy and control on one side. More data and better data on the other. By providing a simple switch we are creating choice,” he says.
The Earn option creates a confusing paradigm for Been Choice. On the one hand, the app means to cater to those who don’t want ads anywhere – even in their native apps. Then, on the flip side, it’s hoping to reach those who are more than willing to sell their souls data for cash.
These two demographics are wildly different, and it’s not likely the ad-blocking users will ever be willing to convert to “earners.” In fact, they’re probably going to be distrustful of any app that talks about user privacy, but then encourages you to give it up for some spare change.
[Update: Some readers are pointing out that VPN services have enabled this sort of ad blocking previously. That’s worth noting, but the difference is that these existed prior to iOS 9 and the release of Apple’s own iAd-infused News application. That the company would now allow an ad-blocking app/VPN service to actually cut into its own revenue stream is surprising.]
Posted by Sarah Perez(@sarahintampa) http://techcrunch.com/2015/10/06/apple-approves-an-app-that-blocks-ads-in-native-apps-including-apple-news/?ncid=tcdaily#.tokpmd:RNzv
