Mobile app success rate in question
|Christian Hargrave in Marketing & Promotion Wednesday, October 3, 2018|
Mobile developers have responded overwhelmingly that they think that their apps are financially successful according to a survey from The Manifest, but is the data true, and how is success measured anyway?
Nearly 90% of app developers and marketers (88%) say their app has made money and is a financial success, according to a new survey from The Manifest, a business news and how-to site. Meanwhile, only 10% of businesses say their app has not been a financial success, and 2% do not know if their app has made a profit. Experts, however, doubt the validity of this high success rate and question what “success” means to those in the app industry.
The meaning of success differs for each company as most businesses determine success in relation to their own key goals and objectives.
“I’d say 90% of apps have a level of success to them” said Dominic Tancredi, co-founder of Dom & Tom, a digital product agency headquartered in New York City.
Success is relative in the app market as companies create different objectives for their apps. These success markers include generating revenue, spreading brand awareness, or creating a more user-friendly interface for customers.
Businesses Spend Significant Resources on App Marketing
App development companies typically allocate a large amount of their app development budget to marketing. Over a third of companies (35%) dedicate 31-50% of their total app development budget to marketing; 21% dedicate 51-70% of their budget to marketing.
Having a planned marketing budget from the start of the development process is important, say experts.
“Marketing should be considered from the very beginning. It should be part of the whole budget, not after the product is ready,” said Anastasiia Marushevska, Head of Content at Django Stars, a product development company based in Ukraine.
Marketing should build audience awareness of your app and then continue to engage customers with new features as your app grows in popularity.
Apps Deliver ROI for Most Businesses
The majority of app development businesses surveyed say they have broken even with their development and launch budget and their app is now profitable, compared to 12% of businesses that say their app has not made back its initial costs.
However, since a modest 0.5% of all apps this year are projected to be profitable, businesses likely analyze app profits through sales leads and customer engagement, in addition to revenue generated, say experts. Apps, especially for B2B companies, often serve as a tool for customer engagement rather than the company’s sole product, or a money-maker.
“Our end goal isn’t an app success, but a product goods success that is complemented by the app,” said Allison Albert, the founder of Pet Krewe, a pet costume company with an augmented reality app.