Are Downloads Driving Your Revenue?

Today users spend nearly 89 percent of their time on mobile devices within an app. So it’s no surprise that companies are putting so much emphasis on delivering a seamless user experience not only on mobile devices but within apps themselves. Users don’t want to have to dig around for content. Instead, it must surface in a way that allows them to make decisions and purchases in real-time. Because of this, in the next year, developers need to focus on re-engagement as their number one metric for success in driving in-app sales and monetization. So what are the forces behind the shift towards re-engagement?

Downloads are vanity numbers

Ever since apps came to be, downloads have been the number one metric that developers care about in measuring success, and as a signal of revenue. Therefore, clickbait and extensive advertising on social were focused on getting downloads. But that metric is quickly becoming irrelevant as more and more apps become free.

Instead, users are now being charged for activities within the app and the download metrics no longer makes sense as a way to measure revenue. Because developers optimize their metrics to reflect what matters to the outside world, it’s imperative that they shift focus away from downloads towards re-engagement to address how user experience on mobile is evolving.

APIs drive apps-as-a-service

Second, developers have moved away from viewing an app as a standalone piece of software that lives on your phone. Instead, apps are seen as a service and the actual app is just an entry point to the service being offered. For example, you use OpenTable as a service inside lots of different apps to check restaurant availability and make dinner reservations; the user doesn’t need to necessarily have to download the OpenTable app to get value out of the service. Developers are using APIs to allow their app services to live in multiple locations. Therefore, developers should care more about the number of times they can get a service in front of you rather than just getting you to download the app.

As such, there is a clear correlation between re-engagement and the rise of API usage. Today developers are pushing out their APIs and getting more use through them than their standalone app. This further supports the concept of reaching a user wherever they may be. For example, Uber cares more about how many rides are ordered per day than how many people download the Uber app which is why they are working to integrate Uber into so many other apps. Instead, apps are becoming more transaction and usage based. This means your metrics need to be optimized to address this shift in thinking. You are no longer optimizing for downloads, but optimizing your app and software for placements, re-engagement, and prediction.

Retargeting for user behaviors

Third, the rise of marketing spend for retargeting campaigns on mobile is rapidly growing from where we were two years ago. Why? Because users are raising the bar on what they have come to expect from an app. Users are becoming less likely to download an app if they can get the content elsewhere. For example, with Facebook, you can read an article right within an app and not have to download an additional app to get that content. Because of this, we are training users to have instant gratification and be able to access content and have functionality from one source instantly. If you are a news source and you aren’t sharing your content within the Facebook app, are you getting any new users? The best news sources out there rely heavily on social media distribution. With re-engagement, there is a lot of friction in getting a new user to download an app. But there is a lot less friction in reaching a user who already knows the UI and/or has seen your content through another familiar app. Developers now care more and more about re-engagement and targeting users who are already comfortable with the experience.

While there already has been a growing trend towards focusing everywhere the user is, in the next year there is going to be a greater emphasis on mashups of different apps or app APIs. When you aggregate mobile apps, it’s all about the API. This is the same idea behind mobile cards, which engage users with the right content and functionality in whatever they are doing. From the user perspective, it’s a better experience. But from the developer perspective, it allows you to discover new types of users and new types of actions. For example, wouldn’t it be great if AirBnB worked with TripAdvisor and whenever someone is looking for a trip on TripAdvisor they would get recommendations on where to stay? We haven’t seen a lot of this collaboration in the early app days and it took a dozen apps to plan a trip. But now, this opens the door for re-engagement within those apps.

As we move into 2016 and beyond, it will become even more critical for developers to focus on re-engagement. Market shifts have put less of an emphasis on old metrics like downloads and they carry far less weight than they did two years ago. Because of this, we are going to see a massive shift towards the metric of revenue. When you are focused on optimizing revenue you don’t care where it comes from, as long as you get that revenue. For example, in the last year, Pinterest introduced buyable pins and cards where users can buy goods from right within their app and never actually have to leave Pinterest. Therefore, if developers continue to use the same old metrics to measure the success of apps, the app is going to be non-existent. It’s time that developers focus on getting their content in front of the right people before they miss out on the next opportunity.

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