There’s More To Your App’s Value Than You May Be Considering

Two stories on mobile app monetization caught my eye last week. Both offer valuable insights on making mobile revenues that every app developer and publisher should internalize, though they come with headlines that don’t quite deliver on their stories’ full meaning.

The first story comes from a conference that took place in New York. Its headline reads, “Mobile ad spend to accelerate as consumption increases.” During one of the event’s sessions, a panelist noted that mobile attracted only three percent of the total 2012 ad spend. That makes the headline a pretty incontrovertible prediction; the industry has almost nowhere to go but up!

The second story could be served up as a sequel to the first. That’s because Gartner projected tough sledding for any mobile app developer seeking to generate revenue. Its scary headline: “Gartner Says Less Than 0.01 Percent of Consumer Mobile Apps Will Be Considered a Financial Success by Their Developers Through 2018.”

With both these sobering stories about the economic bleakness facing mobile, why should companies even consider expanding their mobile enterprises?

I submit that the Gartner analysis overlooks two other value streams that your company almost certainly would find critically important and meaningful to the bottom line.

First, it’s unclear if the forecast includes anything beyond mobile-only monetization, especially one-off app purchases, in-app advertising, and in-app purchases. I suspect it does not include transactions for goods or services. That would mean that things like duct tape bought using the Home Depot app or a National Geographic magazine subscription purchased using the Amazon app are not counted. For any company offering a real world product or service, this is where the real mobile money stands to be made.

Second, it does not consider the value of the data mobile apps can generate. While Nielsen ratings can tell you something about the demographics of the audience watching your company’s TV commercials, and primary market research can deliver a (typically) expensive snapshot of who buys your company’s products, your mobile app can deliver real-time information about who’s actually engaging your brand.

Increasingly there are companies like AppBoy, which I covered in this story, that can aggregate audience information from multiple sources, including mobile, to help you build a much more accurate picture of your customer. That information can help you improve your advertising, product portfolio, brand appeal, and more.

A mobile app strategy that had at its core a sole mission to acquire better information about your company’s consumers would deliver value you’d be proud to share with your CMO.

Coming back for a moment to the first story, when we consider that we’re spending roughly 12 percent of our media consumption time with a mobile screen, either a tablet or smartphone, seeing only three percent of total ad spend go to mobile clearly exposes a mismatch. The reasons for the gap include a dearth of ad formats that meaningfully engage the audience, the struggles of traditional digital ad formats, especially banners, to deliver, a glut of mobile inventory relative to advertisers’ demand for that inventory, and uneven or unreliable performance and audience measurement.

Still, the tide is turning. Companies like Facebook are showing us ways to surmount these obstacles and build meaningful mobile revenues. Remember, too, there are other ways to extract value from your company’s mobile operations. Enabling transactions for actual goods and services and collecting data are just two of them.

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