Smartphone Apps with a Future – Long Tail Profitability

Mar 15, 2018
By: Marissa Camilli

We live in an age of instant gratification. There’s an app out there that can empower you to do just about anything within seconds of you thinking about it.  Just a couple of taps on a screen and you could be shopping in your favorite store, driving (or flying) towards a new destination or equipping yourself with new skills and ideas that can take your education or career to new heights.

While negative media stories might portray smartphones as addictive, timewasting devices, the best smartphone apps actually enable us to solve real world problems and make better use of our time.

The Righteous Path to Profitability

Just because apps are so easy to acquire doesn’t mean they have to be disposable. Successful app developers understand that long-term engagement is the best path to profitability and while their users might expect instant gratification – they have to be in it for the long run. Despite this, many developers struggle to build longevity into their apps, with an estimated 24 percent of all apps downloaded in 2017 being used only once.

Note: Revenue should never be your number one priority in business. Solve your clients’ problems first and the revenue will look after itself. It’s almost like a “happy side-product” of keeping your clients happy. Focus on revenue first and you will actively turn potential clients away. This perhaps best explains why upwards of 90 percent of apps in the Google Play store are free (or freemium) at point of download.

The Sound Business behind “Free” 

When you give an app away for free, you are removing a significant barrier to entry. While the average cost of an app might be only a couple of dollars, it still challenges the potential downloader to question its value. Developers might also question if they are undervaluing their life’s work by placing such a paltry value on their apps but free gives the developer the opportunity to create critical mass to drive revenues in numerous other ways.

These include:

  • eCommerce: In recent years we’ve seen app-based eCommerce completely change the retail landscape, enabling new retail brands to take market share from legacy brands. Apps have also broadened the scope of eCommerce, enabling service-based organizations (like ride-sharing services Uber and Lyft) to take bookings and manage payments without the need to re-enter credit card details.
  • Subscription Services: A diverse range of organizations benefit from selling app-based subscriptions. From news and information vendors to software-as-a-service and entertainment companies, if you can keep your audience engaged on your app, you’ll enjoy the benefits of recurring revenues.
  • Advertising: If your content is good enough to bring users back to your app on a regular basis, it’s good enough to start driving advertising revenues. Remember the more targeted your content is to the campaigns you carry, the more successful (lucrative) your advertising-based business will be.
  • Customer Services: That airline app on your smartphone might do a great job at helping you check-in for your flight, change seats or book extra bag allowance, but it will also help you to book extra flights (and save the airline a ton of money in administration as you self-serve). Smart, push-notifications not only keep you on time but they can also be used to inspire you to take more trips.

A Chicken and Egg Situation

While free is good, it doesn’t mean it is easy. With thousands of new apps being added to the Google Play store every single day, getting the right app into the hands of the right person at the right time, can present something of a challenge.

Failure to generate critical mass of your app’s downloads, will impact negatively on any revenue generating opportunities (regardless of the revenue model you adopt).

It’s also important to remember that an app, once released, has to hit the ground running. If the content isn’t good enough or the service falls short of a user’s expectations during their first engagement, it will most likely be deleted immediately or simply never used again.

Real World Problems, Smart(phone) Solutions

This is especially problematic for apps offering “real world” or “on-demand” services. For example, a ride-sharing app is only useful if users can actually access its “physical” service in the towns or cities where they live and work. Similarly, an eCommerce app is useless to an international audience if the vendor doesn’t ship outside its home country’s borders. The fact is, there is absolutely no point in promoting an app (which is universally available) to an audience who cannot access its service.

This is where targeted preloaded apps become an incredibly powerful option for organizations targeting specific geographies or rolling out nationwide/global services over a specific period of time.

Further Reading: Preloaded Apps Deliver Credibility, Security and Engagement

Preloaded campaigns enable developers to place their apps on specific devices or mobile networks based on highly targeted criteria, such as geography, gender, age, income, etc. This essentially reduces the risk of untargeted downloads and, as a result, limited engagement.

The fact that pre-loaded apps are often viewed by the user of a device as an “integral” component of their smartphone, improves the chances of “discoverability”, giving pre-loaded apps a far greater chance of engagement than their rivals fighting for attention in the app store environment.

Note: Even when preloaded apps aren’t engaged immediately following device activation, their presence on the home screen of a device acts as a constant reminder that their service is available. It works a bit like the classified advert for the plumber used to at the back of an old newspaper. Thanks to its constant presence, you know the service is available but don’t call the number until your kitchen sink starts leaking. Just because engagement isn’t immediate, it doesn’t mean the campaign hasn’t been successful.

Start Building a “Long Tail” Future Today

No matter what your app does, the team at Digital Turbine can help you turn your promise of “instant gratification” into a more robust, “long tail” opportunity.

Start a conversation with one of our smartphone app experts today and build a brighter future for your next app project.

Marissa Camilli
By Marissa Camilli
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