According to a new study, mobile app developers prefer to focus on development, but that's a recipe for poverty.
Writing mobile apps can be a thankless exercise, generating little to no revenue. In fact, according to VisionMobile's latest Developer Economics report, 24% of all mobile app developers can expect to gross a whopping $0.00 for their efforts. Not to worry: according to a separate VisionMobile report (App Economy Profits), there are definite ways to maximize the chances that your mobile app will actually make money.
Most notably, developers should spend less time developing their apps and more time marketing them.
Focusing on the wrong market
With over 1.2 million apps in Apple's App Store and a similar number in Google's Play, it's not surprising that very few developers make money. After all, with so much competition for attention, it's hard to stand out long enough to generate a paid following.
Hence, a mere 1.6% of developers earn more than $500,000 per app, per month. In fact, just 2% of app developers claim 54% of all app revenues, with 88% of mobile app developers scrabbling to eke out a living on just 11% of all app revenues (the remaining 9% "middle class" developers get the rest).
Nearly 50% of all developers make less than $100 per app, per month, and 24% make nothing at all. Mobile may be big, in other words, but that doesn't mean it will be big for you.
The magic of marketing
Part of the answer to this problem is focus. Given that 67% of mobile app developers are focused on the market least likely to generate meaningful, sustainable revenue (i.e., consumer), more developers should consider investing in enterprise apps, which doubles their chances of making at least $5,000 per app, per month.
But another critical component of building a mobile app business is to treat it like a business. Developers that think they can get by with an "if I write it, they will come" Field of Dreams sort of mentality are doomed to fail.
Consider the following data from VisionMobile's App Economy report:
- 57% of developers dedicate at least half of their efforts to development. While 80% do spend time on marketing, the reality is that they don't spend nearly enough time promoting their apps (Figure A)
- 67% of developers spend less than $100 on marketing
- 21% of those who do care about revenues and profits don't spend any time on marketing, while another 50% (i.e. half the app businesses) allocate less than 25% of their efforts to marketing
- Just 19% of developers spending little time on marketing make more than $5,000. The same percentage climbs to 36% for those who heavily rely on marketing
App marketing is a small part of developer budgets.
In fact, VisionMobile finds that those that over-invest in development, allocating more than 50% of an app business's resources to development (Figure B), "is not just a lost investment that doesn't pay off: It actually harms the business, as it both increases development costs and reduces likely revenues."
Marketing pays off, but too much development doesn't.
VisionMobile also points out that customer support is positively correlated with strong revenues. It turns out that both attracting new customers and then taking care of them is good for business — and better than simply spending all one's time developing a "killer app."
Overcoming the marketing allergy
Having spent nearly 15 years working in open source, this sounds really, really familiar. Developers, it's said, have an "allergic reaction" to marketing. They just want to write code, not fluffy marketing slogans.
The best open-source projects, however, require marketing to succeed.
Linux, for example, has thrived in significant part because IBM and other mega-vendors have spent billions (literally) marketing it. MySQL, now a developer darling that runs some of the world's biggest web properties, spent years (and millions of dollars) marketing its way out of claims that it couldn't handle serious workloads.
Mobile apps are different, of course, in that the prospective buyer generally isn't a developer. Instead, the buyer is a consumer interested in a game, lifestyle, or news app.
Like open source, however, that consumer is never going to discover an app unless the developer spends heavily on marketing. Or maybe the consumer has heard of the app, but the information isn't super positive. Marketing can help to elevate an app's profile and resolve misperceptions.
A full 68% of developers report to VisionMobile that they are losing money on their apps, with 11% barely breaking even at $200 per app, per month. As such, developers that are serious about building an app business must allocate much more of their resources to marketing (and customer support), not merely development.
Do you agree that marketing is important for mobile app developer success? Share your opinion in the discussion thread below.