How to increase app revenue by using analytics

Wednesday, March 1, 2017

Tips for increasing mobile app revenue by using app analytics, and avoid roadblocks that slow growth.

Editors note: Guest submission by Mark Rosner, CRO of AppLovin

You wouldn’t create a website without at least one line of code for Google Analytics. So why would you create an app without it?

Analytics might seem like an obvious element to incorporate into app development, but I’m still shocked that I regularly meet developers who don’t use analytics at all, or barely use them beyond tracking basic stats like the number of downloads. Often small development shops and indie developers cite lack of time and manpower for the failure to include analytics.

However, putting some resources toward analytics upfront can make developments down the line much more efficient. Instead of guessing at what might be causing issues with your app, asking friends and family for feedback, and developing multiple solutions that may not work, you can pinpoint problems and develop to solve them. On the flipside, you can also find what’s driving usage of your app and focus on improving those features. Instead of toiling in the dark and making gut-level decisions, employing analytics will save you time as you can make informed decisions.

Most developers track at least basic stats such as number of downloads and how many people are actively using an app. However, these are ultimately vanity metrics - they won’t show you how people are using your app, whether they’re coming back or uninstalling it, at what point in the app’s flow they’re dropping out and more.

If you want to see the vanity metrics like DAU grow, you’ll need to track other grittier metrics so you can course-correct problems and continue to watch that number increase. You’ll want a deep analysis of how your users are behaving in your app.

Here are a few basics statistics that you should track:

User Retention

It’s easy to get distracted by downloads, but user retention is just as important if not more so. If you have a low retention rate, then any money you’re spending on user acquisition is essentially wasted. Gaming, social, lifestyle, media, travel and shopping apps in particular have some of the shortest lifespans and face an uphill battle with retention, so you must have analytics that closely monitor it.

Retention is generally measured by looking at the number of days users continue to engage after downloading and by analyzing in-app events. With analytics, you can see at what point in your app users are dropping off and closing out. Generally that means there’s some kind of recurring bug, issue or roadblock, and you can develop to resolve it.

Activity

Getting users to install your app isn’t that challenging, especially if you have paid user acquisition strategies in place. The bigger issue is keeping them active and engaged. You should look at daily active users, weekly active users and monthly active users along with lifetime activity (any users beyond 365 days is generally the threshold here) to see how much people are using your app and how often.

You can also look at the average length of session time. Depending on the kind of app you have, you may want long or short sessions. If you have a utility app, you generally want the sessions to be short and sweet, but if you have a shopping app, you ideally want people spending more time browsing and therefore adding more items to their cart. Make sure to figure out what’s best for your user experience, and then track and see how your app is performing.

In-App Purchases

Most mobile developers today make a great deal of their money off of in-app purchases (IAPs) for goods, power ups, or in the case of games, in-game currency. You should track not only the number of IAPs per player and the dollar amount of revenue per player, but also the time until purchase. When do the first, second, and subsequent purchases usually occur? After a user makes one purchase, do they continue purchasing? Is there a certain purchase number after which most spending users drop off? These figures are extremely relevant to your revenue, so watch them closely.

Once you’ve got the fundamentals, you can start to get more creative with what you use analytics for.

When you have the analytics basics nailed down, you can easily incorporate them into your development strategy. You might discover things like high shopping cart abandonment rates, which are easily reduced by simply incorporating Apple Pay, or you might find a bug that should become a feature by looking at user behavior in the app. By tracking these metrics, you can find hidden sources of revenue in your app that will ultimately better your bottom line.

This is really the tip of the iceberg. I hope I’ve convinced those who think analytics are a “nice to have” that they are in fact a “must-have.” You don’t need to devote your whole working life to tracking analytics, but the more energy you spend in this area, the better experience you can create for your players, and the more successful you can be as a publisher.