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.
Here’s why and how you can thrive with Google Play.
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.