Thriving with Google Play
Apple’s planned phase-out of the UDID has introduced considerable angst in the app marketing community. The UDID provides a standard, widely supported method for attributing performance of advertising campaigns. Unfortunately, there’s no single solution to replace the UDID and it appears the iOS market is fragmenting, with multiple technologies vying for developer attention. This is making it difficult for app developers to allocate their resources.
With all this uncertainty, some marketers are looking more closely at Google Play to fuel their continued growth in mobile. Unfortunately, many marketers are sidestepping Android development based on several published reports indicating that Apple’s iOS monetizes significantly better. Savvy marketers know that high-level statistics often mask a much more complex reality. While we’d never suggest that the iOS market be ignored, once you do the math you may find that Android represents a much more compelling (and profitable) opportunity than you thought.
Bigger yet cheaper…
For sheer size, the Android platform has no equal. According to Nielsen, Android has more than 48 percent of the smartphone market, versus 32 percent for iOS. Google indicates there are 850,000 Android device activations per day and total Google Play app downloads have reached more than 15 billion. App search firm Xyologic reports that in March 2012 there were 617 million app downloads on Android versus 393 million app downloads on iPhone in the U.S.
Android also provides more advertising inventory, and at a lower cost. A recent analysis Fiksu did of available impressions concluded Android is able to deliver 12 percent more ad inventory than iOS. Further, the estimated cost of those impressions was 40 percent lower.
Android also has a number of practical advantages over iOS that make it a great environment for market testing and quick rollout. Since there is no app approval process, you can quickly iterate your design and determine what features or offers work best. Updating an app can take weeks with iOS due to Apple’s submission and approval process.
In some ways, Google Play is also a more accessible market. Competition in the iOS sphere is extremely intense. Marketing any app is challenging, but the explosion of new apps and changes in Apple policy have made breaking a new app into the iOS market a much tougher hill to climb. Xyologic reports they “have seen the momentum of iOS for app publishers slow down considerably in the last 5 months. Several key performance indicators we track are down, especially the amount of new apps which make it to the Top 100. We view this as evidence of the new challenges the Apple environment puts on app marketers.”
Unlike iOS, where rank is critical and often expensive to attain, Google Play has a strong search engine that makes it easier for interested users to find your app. Our experience is that 80% of the organic users in Google Play come from searches.
Finally, Android also solves the problem of marketing attribution, since it provides referrer information that anonymously identifies the source of a download. This is a single industry-wide solution that provides reliable data, yet balances the need for user privacy. You know exactly where your ad dollars go. You know exactly what is and isn’t working. And there’s none of the data ambiguity or user experience issues seen with some iOS tracking solutions.
What About Monetization?
Of course, the big concern about Android is monetization. There’s clearly a gap: an oft-quoted post last December by Peter Farago of Flurry indicates Google Play monetization is roughly 24 percent of that of iOS. It’s important to note that the gap is closing. Flurry notes that the biggest factor behind the gap is payment mechanisms, and expects this situation to improve with the integration of Google Wallet and Google Checkout. Evidence of improvement has already surfaced: app research firm Distimo indicates it saw an 80 percent improvement in average daily revenues for the top 200 US apps between December 2011 and March 2012. Furthermore, in a post titled Treat Android as a first-class citizen… it’ll pay off! TinyCo noted that Average Revenue Per Paying User (ARPPU) for Google Play and iTunes is about the same as iOS, and found that Amazon performance surpassed that of iOS by a significant margin.
Beating the Averages
One problem with the monetization statistics on Google Play is that they cover the “average” experience. We’ve seen that if you target users effectively and you employ the right development strategy, Android apps convert and generate loyal users at roughly the same rate as iOS apps. More significantly, they do so at a lower acquisition cost.
In Q1, Fiksu conducted a study of six clients running the same apps on both iOS and Android to determine differences in acquisition cost and loyal usage conversion rates. (Loyal users are those who return repeatedly to an app and are most likely to monetize.) The cost of acquiring an install was 24 percent lower for Android than iOS. Given the monetization issues noted above we expected a higher conversion from installs to loyal users for iOS. Instead, what we saw was that once a user was acquired, the loyalty rate was exactly the same for both platforms. The only difference was that the cost of acquiring those users on Android was 24 percent lower.
There are, however some exceptions where iOS does beat out Android. For example tablet based shopping apps are an area where iOS excels. Other than the Kindle Fire, there is no Android-based tablet that can challenge the iPad. Further, payment processing is stronger on iOS. Fiksu data shows that for such apps loyalty is far stronger on iOS. However, these issues are being addressed in the market and those shopping apps that move to Android now will have a significant early mover advantage since Play’s algorithm rewards total downloads and usage.
How to Thrive with Google Play
It’s clear that there are many apps that are struggling in the Google Play environment, yet some are doing extremely well. Here are factors that we’ve found have made for a successful Android implementation:
Good design has its rewards: A key to rising above the averages is simply to design for Android. Many developers port iOS apps to Android as an afterthought, resulting in a sub-optimal or even buggy user experience. ESPN for example, shared during a recent webinar that their ported apps originally did not perform to expectations. When they took the approach of developing specifically for each environment, they found that performance was on par with iOS. Another example is game developer TinyCo. who specifically ascribes its aforementioned success with Android to taking “the Android pledge” to treat Android as a first class citizen. The result was that TinyCo doubled its market opportunity.
Prioritize device and OS support: With the large number of form factors in Android, developers can find themselves stretched trying to determine what devices to support. Fortunately, a subset of roughly 20 devices makes up about 80 percent of the volume for Android, so the problem is more manageable than one might suspect. Similarly, more than 90 percent of Android devices are addressed by supporting OS version 2.2 and later.
Look forward: In hockey, there’s a saying “skate where the puck is going” (not where it is now.) The monetization issue that has received so much press is being addressed as more consumers adopt Google payment mechanisms. As noted above, there are already indications that this situation is improving rapidly. In addition, Google’s rank algorithm benefits longevity yielding an early mover advantage for apps debuting on Play sooner.
Leverage lower customer acquisition costs: The enormous scrum of developers scrapping over the iOS marketplace has resulted in higher acquisition costs. Android presents an opportunity to develop market share and test new strategies at a lower cost.
The following best practices will maximize the return on an Android implementation. Here are some practical tips for success:
- Maximize search potential in your app title: identify your most successful keywords and make sure to include them in your app title. In fact, this is so critical to success (potentially 80 to 100 places in your search ranking), that you should seriously consider removing your app name from your title and focus your description on the best keywords. Include the app name in the body of the app description – users will still be able to find it by name. Unlike iOS, the body description is searched under Google Play.
- Use, but don’t overuse, keywords: try to use the best keywords at five times the body of your app description. This can affect search ranking from 10 to 20 places. Anything over five times has no additional benefit, so don’t overdo it.
- Test your search parameters: the above recommendations are guidelines based on accumulated experience, but search results can vary based on many factors.
- Steady efforts work best: Google Play’s ranking algorithm is tilted towards long term user acquisition – apps that acquire and retain satisfied users are rewarded with higher ranks. Advertising campaigns should be run over a longer term and sustained over two to three months, as opposed to the short bursts of activity often seen in the iOS market.
- Use closed loop attribution and target long term users: since retained users have an important impact in ranking, use closed loop marketing to ensure you are identifying and utilizing ad sources that bring loyal users.
- Don’t be afraid to experiment and test market your strategy with Android. You can apply these learnings to your iOS versions and reduce your costs and risks.
The ecosystem continues to provide an unprecedented growth opportunity for mobile app brands. While there are several options that iOS-centric developers may explore to maintain their growth in the wake of UDID deprecation, perhaps the biggest opportunity has nothing to do with iOS at all. Android offers a bigger overall market, increased amounts of marketing insight, lower user acquisition costs and, in many cases, users who are at least as engaged as their iOS counterparts. Perhaps it’s time that we all thrived with Google Play.