Going to the App Market

The proliferation of connected devices and platforms has encouraged dozens of companies and providers--including online retail giant Amazon--to establish an application storefront and get in on the action. More marketplaces may mean more choice for consumers, but it also turns up the pressure on publishers and marketers to learn how to do business in a new, booming "App Economy."

The opportunities are impressive, but the new terrain is tough to navigate since the avalanche of mobile apps has caused an irreversible change in the content distribution landscape. It's a profound shift that market analysis and strategy firm VisionMobile has expertly identified and documented in "Developer Economics 2011." The landmark report, which surveyed some 900-plus developers across 75 countries, found that "app stores are the primary go-to-market channel" for almost half (45%) of mobile app developers across the eight major platforms.

The report also found that use of other application distribution channels has consistently declined across the board. Specifically, the report shows a significant drop in distribution via third-party aggregators, on-device preloads, and publisher websites. Even more dramatic is the state of mobile operator portals, destinations that once dominated downloadable content distribution.

App stores are the place to be, but don't be afraid to look beyond the Apple App Store. After all, a sharp focus on Apple ignores the massive uptake of other platforms and handsets, including Google's Android and RIM's BlackBerry (a huge hit among youth in countries across Asia Pacific). What's more, it also limits the choice of monetization models because the Apple App Store, purposely built on its existing iTunes storefront, effectively excludes people-including many Millennials and much of the developing world-who simply don't own credit cards.

It's much wiser to explore your options. This means developing and embracing diverse business models and monetization approaches-ranging from paid apps and apps bundled with subscription offers to ad-funded schemes and loyalty programs that offer apps to boost brand awareness.

It also means investigating the long tail of app stores to find a fit with your target demographic. The Wireless Industry Partnership (WIP) counted a whopping 120-plus app stores at press time. But figuring out where to offer and how to monetize your app is just half the battle. You also need to work out a strategy to increase your app ranking, cost effectively generate downloads, and identify (and keep) your most loyal users.

This is where Fiksu, Inc. comes in. Fiksu has developed a real-time mobile app user acquisition platform that spans the entire mobile app ecosystem-including an extensive number of ad networks, real-time bidding platforms, and incentivized download programs-to help content companies and marketers identify their best customers.

The build-and-they-will-come approach that marked the early days of the App Economy has been replaced by the hard truth that apps do not sell themselves. "Consumers today have an insatiable appetite for downloading the hottest new apps that reside among the half a million crowding the app stores. As a mobile marketer, this spells both challenge and opportunity, as discoverability hinges on getting your app ranked high enough in the app stores," Micah Adler, Fiksu CEO and founder, explains. How do marketers make it to the top? "They have a choice: They can spend huge chunks of their marketing budget to overcome the needle in the haystack problem or they can focus their efforts on identifying and securing loyal users."

Fiksu defines loyal users as those who take an action with the apps they download, such as making an in-app purchase or filling out a registration form, that can be directly tied back to your ROI.

Interestingly, data is a must to market apps successfully, from identifying local users to pinpointing the ad networks and traffic sources that deliver them in the first place. However, the white paper recommends that content companies and marketers should make room for a little serendipity.

Rather than second-guess customers and list an app in categories where people might be looking for your app, take a more long tail approach and list your app in a variety of categories. It's much better (for your brand and your budget) to take a Top 10 spot in a niche category than it is to rank in the lower half of the Top 100 in a category where the competition is strong and visibility is weak.