Amadeus Consulting’s Director of Digital Marketing, Monica Valdez, was
recently interviewed for a blog article called "Should you Have an App
for That?" This blog, written by Kim Willoughby from the Center for
Sales Strategy, is a great article for businesses trying to understand
the business case for building an app.
I thought I would expand
on this idea a little and take a different angle. Many articles have
been written about how to develop an app, why you should develop an app,
why you shouldn’t, what you should do with the app once it’s developed,
and on and on the list goes. In fact, you can read all these ideas and
more just on the Amadeus Consulting Mobile Technology Watch blog.
What about the value of an app? Not just revenue, though that is part
of it, but the overall value an app will bring your business. Of course,
all companies differ and what might make sense for one doesn’t make
sense for another, but in general most companies should be at least
paying attention to what is happening in the mobile space.
In-App Advertising
I did a little Internet research to find a good infographic about app
value and found one by Mobclix, called Monthly Value of an App User, a
real-time bidding mobile ad exchange. Although this is from last year,
this infographic is great information for any company thinking about
using mobile advertising as a way to earn revenue. It’s not terribly
surprising that iPhone app users have a higher value, but I did find it
interesting that utility app users have a higher value. Basically,
in-app advertising is a good way to make revenue off your app without
charging users up front for the app, but this really only works if your
app has a large user base to generate enough ad impressions.
In-App Purchases
In-app purchases are a way to make money off your user base without
charging them up front for the app. Generally, this is advantageous for
newer apps that don’t have a large user base yet and don’t want to
charge for the app right away. Some apps might charge for an enhanced
user-experience, or use things like tokens that users can purchase to do
more with the app.
In-app purchases have big revenue potential,
according to IHS Screen Digest, a mobile media intelligence service. In
2011, in-app purchases accounted for 39 percent of the revenue for apps,
and will likely be 64 percent (or about $5.6 billion) of total revenue
by 2015. This is clearly a big opportunity for companies wanting to have
a free app but still earn revenue.
The Value of Tablets and eReaders
This past holiday season saw a big jump in the number of people with a
tablet or eReading device. According to Pew Research Centers Internet
and American Life Project, the percentage of adults in the US owning a
tablet device jumped from 10% in December to 19% in January. With the
introduction of tablets at a lower price including the Kindle Fire and
Nook, there is a wider audience in the tablet space.
This new
trend represents another opportunity for companies to develop a mobile
app optimized for the tablet, since close to half of tablet owners made
or completed a purchase on their tablet. Tablets have a lot of potential
for more engaging apps, and the more engaging an app is the more value
your company will get from your users.
Creating a Mobile Strategy
As I said above, the value of an app isn’t just about revenue. Clearly
there are a lot of areas where a business can make a profit in the app
space, but companies have to be smart and have a strategy. Considering
the number of apps out there in the world right now, a business can’t
just expect to build an app and then instantly have a revenue stream.
Mobile app promotion is a key part of building value from an app.
Some companies may just want to offer an app as part of their overall
product offering. The app itself doesn’t have to be the money-maker.
Amadeus Consulting’s CIO John Basso made some 2012 tech predictions, one
of those being that mobile will no longer be a feature but an
expectation. Especially as more of our technology is becoming integrated
with mobile, consumers will soon expect that anything they buy is
integrated with their smartphone. So any company not thinking about a
mobile strategy right now is likely to get left in the dust.
Mobile app development companies like Amadeus Consulting offer
consulting to our clients to help make sure they are taking advantage of
mobile in the way that is best for their business model, so if you just
aren’t sure what to do or how to get the value you want out of an app,
feel free to contact us for help!
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