Mobile Industry Exposed #6: App Annie “The app market parallels the film industry”

By Hayley Pearce | October 10th, 2014

App Annie interview app market

It is now time for the sixth instalment of our Mobile Industry Exposed interview series, which has featured key mobile industry players such as Serkan Toto of Kantan Games and PubNative’s Ionut Ciobotaru talk about everything from Japan’s mobile app market to native advertising.

This week we spoke to Marcos Sanchez, App Annie’s VP of Global Corporate Communications.

App Annie talks to AppLift about the mobile app marketMarcos leads the charge on App Annie’s global communications and content programs. Before joining the company, Marcos served as the Director of Marketing at Egnyte, a leading enterprise file sharing company. Marcos, who was on the founding team of iBand – which was later acquired by Macromedia – has more than 16 years of experience working with startups. Previously, Marcos served as a Communications Strategist at Clarabridge and has held various positions in marketing and product management, including as Spokesperson for the launch of Macromedia’s Shockwave product and as Lead PR Strategist for launches of VeriSign, CyberSource, and

1. App Annie acquired Distimo in May of this year. How has the story gone since then? The Distimo acquisition has been truly exciting for us for a whole host of reasons. First, it’s allowed to us to accelerate our growth trajectory in the mobile analytics space. We now work with over 90 percent of the top 100 publishers and have 600,000 apps relying on App Annie Analytics. Perhaps the most exciting part of this growth however, is the diversity of our Analytics users. In addition to the gaming vertical, we are seeing great traction across marketing, travel, finance, automotive, retail and many more. This is a reflection of just how diverse the app stores are becoming.

Second, it’s been extremely beneficial in our continued efforts to make App Annie the preeminent source of mobile app analytics. We’ve accelerated our engineering efforts, which has brought new data sources and features like support for 28 ad platforms including Facebook Ads. It’s also allowed to us think more broadly about what the mobile analytics space is, and move our future plans forward at a more rapid pace.

2. What are the most important things for mobile developers, publishers and marketers to consider when choosing an app store analytics provider? App Store analytics is a critical part of any mobile app analytics strategy, so aside from the stability and size of the provider (it is your data after all, so you want an established company to feel secure about where it lives) here are a few things. Is the approach comprehensive? You want to be able to look at all your revenue sources, not just app store, but also advertising and other sources. Is the approach extensible? Has the provider designed their product to extend to new platforms, providers of data, and so on?

Can you access data that will give you a view of your competitors and market in general? Look at whether you can somehow access the larger trends in the market or track your competitors. It is important to not work in a vacuum. Also make sure that the data is as accurate as possible – no one wants to work off bad data. Lastly, you’ll want to make sure your app store analytics provider offers a variety of ways to access your data – Web, mobile, BI software, Excel – as well as the capability to download it in raw format periodically.

3. According to the latest figures, how is in-app revenue evolving versus paid revenue, and how is advertising revenue evolving versus app store revenue? The last few years have shown freemium to be the dominant business model across the app stores. Although most prevalent in games, the freemium business model has successfully expanded into other categories such as messaging, music, news, and dating. As a result, paid and paidmium revenues represent a small and shrinking percentage of overall revenues 2012 to 2013 while in-app advertising and purchases have skyrocketed. While this trend is likely to continue, in-app advertising appears to be poised for the largest growth in the coming years.

The rise of in-app advertising of presents its own set of issues, but is still extremely promising. While it can be used to grow revenue, it requires robust strategies that leverage multiple ad platforms and ad types that align with the audiences being targeted. Keeping track of this data is no easy task, but is 100% necessary, so solutions that aggregate and allow publishers to visualize their data are going to be critical.

4. What are the most exciting emerging and booming markets and how should mobile publishers prepare and execute their entry strategies? The app economy is truly global, and the emerging leaders may surprise you. By revenue on iOS, the US, Japan, China, and the United Kingdom are the leaders. By revenue on Google Play, Japan, US, South Korea, Germany and Taiwan take the lead. These are certainly the boom markets, but where things get more interesting is in the emerging markets. There, we see folks like Brazil, India, Russia, Malaysia, Indonesia and even Thailand.

That all said, while the app economy is truly global, moving into new markets is not always as simple as translating your app. In order for an app to be successful, companies may need to localize and culturally adapt their app. Further, it could also require a shift in monetization model or additions of new features. That’s not to say you shouldn’t do it, but it’s critical to look at what apps are already successful in a market and learn as much as possible about what success looks like in that country.

What’s the size of the potential opportunity (i.e., how much money is being made in that category)? What are your competition’s download numbers? Will freemium still work as a monetization model? If so, will you need to adjust pricing, or when in an experience someone is asked to upgrade? If not, will monetization be from in-app advertising? Does a translation really mean the same thing? What’s the local slang? Who has smart devices? These are all questions that should be asked.

5. What do you consider as the biggest challenges right now for mobile developers and publishers? Discovery. Google Play and iOS app stores alone currently have over 3 million apps, which is a significant number when you consider the number of apps you might use at a given time. Add to that consumer app fatigue, which waxes and wanes based on hardware upgrades and a host of other seasonal events. This means getting your app noticed is a huge hurdle, not to mention the issue of keeping people engaged once they’ve downloaded your app.

There are a few strategies that I recommend following: first, make sure that your app name and descriptions are optimized for app store searches. See what keywords your competitors are using, and which ones are popular in your target markets. Adjust accordingly, and adjust as often as necessary (except your app name). Second, provide regular app updates to keep your app top of mind. Lastly, don’t be afraid to experiment. Just make sure that your experiments are data-driven and that your successes and failures can be learned from.

6. How is app store market share evolving? Can Android catch up to iOS in terms of both downloads and revenue? Currently, Google Play has more downloads than iOS app store, yet the iOS app store maintains its lead when it comes to revenues. I suspect as with many things in the tech space, we will continue to see movement back and forth. These things are constantly affected by advances in hardware, fluctuations in pricing, corporate strategy and the like. The market supports an extremely large and diverse global community that can easily support two or more major players. It is healthy, and consumers win when competition remains.

7. Apple has reportedly paid out over $15 billion to developers to date. How even is the distribution of revenue and installs among publishers in today’s app market? The app market does seem to parallel the film industry, where blockbusters take a large market/revenue share, and are only occasionally eclipsed by a great indie film. This is likely to continue with the majority of revenue going to the top publishers. That said, there is still plenty of incentive and room for the smaller guys, and the growth of international markets will keep adding new app users to the pool.

8. What can we expect to see on the App Annie platform this year and beyond? App Annie is continuously evolving to serve the needs of mobile app ecosystem by providing a robust mobile analytics platform. That means that you will see regular updates to our existing product lines, and also additions that will allow our customers to dig deeper and gain more profound (and profitable) insights into their apps and the market in general. Mobile analytics is a big space and there are plenty of new areas for us to explore. Our main goal is to help our customers grow their businesses and have the most successful mobile apps possible.

Thanks to Marcos for his time.

Stay tuned for the next Mobile Industry Exposed interview, which will be published in two weeks’ time!

Hayley Pearce

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