Archive for the ‘Case Study’ Category

09 Nov 2009
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Help your potential clients as if they are already your clients. By AlexNesterov in Case Study

There is no real difference whether it is a new client bothering you or someone who already invested $10K in your code typing. You should accommodate all of them in the same way – with love and care. The new client shouldn’t wait until you get down to him from your hill of imaginary over-valued skills or (often imaginary too) lack of time. He should feel that he is the one who is being waited for, he should feel himself as if he is the only one client in the world and the sense of your life. And he will become your client for ever.

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27 Oct 2009
2

Japan’s Growing Mobile Landscape By Hans Erickson in Case Study, Mobile Development, Mobile Development News

I’ve gotten done reading some really great slides from Morgan Stanley’s MS Economy Internet Trends.  I’ll dip into them for some future posts, but the ones I found really interesting were on Japan.  I believe that even if the west doesn’t follow the exact same trajectory, Japan’s mobile trends at least provide a broad estimate as to where mobile is headed in the US and Europe.

I think it’s safe to say that as far as Japan’s mobile landscape and economy is concerned, they are ahead of the rest of the world.  They have robust data networks, have wider smartphone usage, and continue to see some amazing growth and uptake.  So with this in mind take a look at Japan’s mobile internet revenue mix:

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This is over eight years, I know, I know, a lot happened in those eight years, but revenue grew more than 500%!  And as the chart points out, when you look at the percentage make up of the various categories, the rest of the world in 2008 looks remarkably like Japan in 2000. Will the world see mobile revenue growth to almost a trillion dollars in 2017?  Hard to say, but there have been predictions that mobile ad spend will quadruple by 2015.  This next slide shows that in the past 4 years mobile commerce has actually quadrupled:

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Granted, desktop ecommerce has also quadrupled, but I predict that that this number will level off and even start to lose out to mobile commerce as technology improves and more and more people become accustomed to carrying out transactions on their phones. This last slide has nothing to do with revenue but is more a reflection of why, when, where, and how people in Japan are connecting to the internet:

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In 2006 86% of page views on Japan’s leading social networks were from a desktop.  In just 3 short years this number has plummeted to 26%!  Now, some of these astounding numbers are certainly being driven by the fact that some of Japan’s leading social networks are mobile only, but no matter how you slice it this is nothing short of incredible.  65% of pageviews now take place on a phone.

Conclusion

Let’s say in looking at all these numbers that the world follows Japan only half way.  We’re still looking at a vastly different mobile landscape than exists in the west today.  Nothing short of a revolution in the way we are connecting to and engaging with the internet!

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13 Oct 2009
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Mobile Ad Spend Projections By Hans Erickson in Case Study, Mobile Development, Mobile Development News

Coda Research has released a report that says that mobile ad spends will rise to a whopping $4.2 billion by 2015, up from a projected $1 billion for 2010.

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Both figures seem a bit high, but as with all market projections, at some point it becomes tough to predict.  Some of the key assertions in their report are that the form of mobile advertising will shift dramatically.  Have a look below:

Picture 3Right now 61% of mobile advertising is done via SMS.  Coda foresees that number shriveling to 3% by 2015.  They see Search gobbling up 70% of mobile ad spends in 5 years.  They see a steady increase in Display advertising as well.

Just as an interesting counterpoint, eMarketer released a much more conservative report a couple of weeks ago that projects mobile ad spends to hit only $1.56 billion by 2013.

Picture 5But they appear to agree with Coda, though not nearly as drastically, that Search and Display will rise in usage and SMS will decline:

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06 Oct 2009
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U.S. Internet Ad Revenue Declines By Hans Erickson in Case Study, Mobile Development, Mobile Development News

The IAB and PricewaterhouseCoopers released U.S. Internet advertising stats yesterday for the first half of 2009.  The total was $10.9 billion which represents a 5.3% decline from the same time last year.  Not all that surprising given the global economic downturn, but it has been clear that as marketing budgets have shrunk, so have ad spends on the internet.  Here is the breakdown of how money was spent in the first half of 2009:

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As you can see, Search represents the largest share of internet ad spend. Looking at the same time period last year shows some slight but interesting variations.

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Spending on Classifieds has shrunk 4%, as has Email Marketing down 1% with a 3% gain in Search.  What surprised me was the increase in Display/Banner Ads.  As of late, it seemed Banner Ads were on the decline since click through rates have been slowly decreasing and consumers seems increasingly immune to them.  Perhaps I’m not accounting for the new Banner Ad models that have taken hold such as Cost Per Action and such.  As well, I could not be aware of an increase in Display type advertising.  Here is another look at changes over the past 5 years.  Interesting to note that the only real losers over time have been Sponsorship and Classifieds.

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And here is a nice look at who is spending all this money.  Most industries show a decrease or an equal amount of money spent over last year with Media and Telecom being the exception.  Nothing drastic which, to me, says that the decreases seen are more just a reflection of the poor economy and not a pull back from the internet as a platform for advertising.

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01 Oct 2009
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Analysis of the Techcrunch 2009 Web App Survey By Hans Erickson in Case Study, Mobile Development, Mobile Development News

Techcrunch has released the results of their 2 month Web App Survey.  Some pretty interesting results.  I’ll highlight the ones I found most interesting. First off, the good and bad news.

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A quarter of the respondents have apps that see 10,000 active users or more!  That’s 20,000 apps that are seeing some fine activity.  But 30% have 100 or less users.  24,000 apps just sitting there.  First off, I’ve seen the quality (or lack thereof) of that bottom tier so I’m not too surprised.  Too many developers cranked out ill-conceived or poorly executed apps in a rush to “the gold rush.”  I’m actually more surprised that 20,000 apps are getting a fair amount of use, given the sheer number of apps and their seriously limited channels of discovery.  But then again, there have been a purported 1 billion apps downloaded, clearly some apps are getting used.  And that bottom tier begins to make even more sense when you consider the following:

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It is clear by now that the mobile app market is a very different beast than many industries, having seriously limited channels of delivery and discoverability, and with that in mind it could be argued that spending gobs of money on marketing won’t yield traditional results.  But for 54% of developers to just push it out there and then sit back and see what happens seems silly.  And of course it’s probably that same 54% reported that their app costs them nothing to maintain.

The next several slides go through the number of people working full time for the app in various capacities.  75% report zero to one full time engineer (with 34% of that reporting zero).  And with that the rest make sense, full time designers; 65% don’t have one, full time marketers; 59% don’t have one, full time managers; 59% don’t have one.

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Nearly 50% have just one founder.  The picture of a lone developer, working late into the night on his/her app really seems to hold true, at least half the time.  And when you account for the other 32% of founders that are reporting being a team of two, it’s not hard to see how a whopping 82% of applications are bootstrapped. Basically one or two people working together on their own dime and time to create an app.

But I’d like to close with some good news for those wishing to develop a mobile app and make it their living. Look at the following slide:

Picture 9Read one way, 79% of apps are supporting 1 or more people.  Now we don’t know what being “full time staff” really means in terms of what people are getting paid, but I have to assume that the majority of these people are making a some sort of decent living.  So it can be done.  Like all statistics I’m sure there is much more of a story here, but gleaning what we can from the above I’d say that mobile app development is still a compelling proposition.

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30 Sep 2009
4

Marketing Mobile Applications: Some Great AdMob Metrics By Hans Erickson in Case Study, Mobile Development, Mobile Development News

The mobile application market is still pretty young compared to many industries.  However, not many industries have experienced the explosion of uptake and growth that the mobile app world has seen in the last 15 months.  To lend some clarity on how best to deal with this mushrooming beast is AdMob, the mobile advertising platform, with their study on iPhone and Android App Discovery and Usage issued this past August.

First lets look at the findings.

Point of interest number 1: 90% of app discovery takes place on a phone.  This is a monumental shift from web and desktop applications.  No longer confined to sitting at a computer, people are hunting for new apps from virtually anywhere, to the point where “looking for new apps” could possibly be considered a form of entertainment in itself.

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Point of interest number 2: iPhone and Android users are spending an average 80-90 minutes a day using apps.  Granted, this number was arrived at utilizing some assumptions, but even without the weighted assumptions the numbers are still remarkable.  Over a third of iPhone and Android users are on their phones for more than an hour and well over half of iPod Touch users are using apps for more than an hour:

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Point of interest number 3: iPhone and Android users are downloading about 10 apps a month and iPod Touch owners are downloading 18 apps a month.  Of further interest is the fact that iPhone users are actually buying the most apps, averaging 2.6 per month. iPod Touch owners are a little behind that with 2 apps per month, surprising given the almost double rate of downloading.  Android is far behind with roughly 1 paid app sold a month per user.

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Point of interest number 4: Free to paid upgrading is the most significant driver of paid app purchases.  This holds true and is roughly the same across all platforms.

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What This Means for Marketing and Application

1) Visibility in the respective app stores is the number one way to drive downloads. With 90% or more of apps being found from a toilet seat, a bus bench or a couch the absolute best way to drive the sale of your app is to show up in the rankings or other high visibility parts of the app store interfaces.

2) A large portion of users are spending a significant amount of time on their phones. These numbers seem greater than what anyone was predicting two years ago.  Not only is possible to reach a highly targeted and interested audience through platforms like AdMob or Google Mobile Ads, but you can turn around and utilize these platforms to make money by serving ads in your apps.  Or look into mobile branding opportunities that don’t necessarily rely on click-through rates, but are more about a brand getting it’s message to simply show alongside your quality content.

3) Make a Lite version of your application. Study after study has come in over this past year showing that Lite versions drive paid downloads.  Perhaps it’s the double visibility, or the “try before you buy” advantage, but either way, Lite versions boost sales, and if it is simply adjusting or restricting the functionality of what you’ve already built, there’s no reason not to.

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28 Aug 2009
1

Interesting AdMob Mobile Metrics By Hans Erickson in Case Study, Mobile Development

AdMob, one of the top mobile advertising marketplaces, recently published a report that contained several very interesting mobile metrics (390 Android, 380 iPhone and 347 iPod Touch owners from a survey that was run from August 14th – August 21st).  The first finding of note, which isn’t that surprising given that it’s the same as what others have found, says that 90% of respondents reported they primarily found applications by browsing their respective stores/marketplaces.

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This speaks to the extreme importance of app store rankings and user feedback for mobile developers.  Unlike desktop or web-based application development, mobile development success seems to take place in an extremely confined environment in which many of the traditional channels to publicity on the web can’t help drive sales.  Further, The top reason given for purchasing paid apps for Android and the iPhone was “I like the free version and upgraded” followed by “I’ve read good reviews” and “Word of mouth recommendation.”

On average, Android and iPhone users download 8 new free apps per month, while iPod touch users download an average of 16 free apps per month.  No follow up question was asked to shed some light on why this would be, but it would seem that the iPod Touch’s younger demographic and their interest in games might have something to do with it.

iPhone and iPod touch users are twice as likely to regularly download paid apps as Android users.  19% of Android users regularly download 1 or more paid apps a month, compared to 50% of iPhone users and 40% of iPod touch users. For users who regularly download paid apps, the number of paid apps downloaded and the average amount spent each month was similar across platforms.

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These users spend roughly $9 a month and download 5 paid apps per month.  Dividing the average amount paid per month by the average number of paid apps downloaded yields an average app purchase price of about $1.80.  This should be heartening news to mobile developers, particularly those developing for the Apple OS.  With some very rough extrapolation this makes Apple’s App Store nearly a $200 million a month business.  Android’s Marketplace, which is still very much a developing community, makes a respectable $5 million a month.  As more devices come online that run the Android OS this number should only rise.

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Last takeaways: In looking at the numbers and percentages of requests by manufacturer it appear that the iPhone is the preferred smartphone platform of the US and the UK (60% and 64% respectively), while Nokia has a huge edge over all others in countries like Indonesia, the Philippines and India (97%, 96%, and 95% respectively).

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20 Aug 2009
0

Americans Not Listening to Music on Their Phones By Hans Erickson in Case Study, Mobile Development, Mobile Development News

Forrester Research has completed an interesting bit of research that says that Americans are not listening to music on their cell phones like people in many other countries, despite years of industry projections that Mp3 players, phones and PDA’s would merge into one.

SonyEricW610MusicListen-1

The report, “The Future of Music On Cell Phones,” said 10% of adult Americans listen to music on their phones once a month. By comparison, 27% of British adults and 70% of Chinese used their mobile handsets to play tunes.

Several issues are contributing to this phenomenon according to Forrester.  People in other nations are less likely to have dedicated Mp3 players.  They are also more likely to be savvier with their electronics and tend to have more options for acquiring music.  One example is Nokia’s Comes With Music, not available in the US, which gives users unlimited access to music for one year on their handset.

Forrester predicts that eventually Americans will listen to music on their phones, but the uptake will be slow.  According to the study 60% of respondents said they had no interest in listening to music on their phone. These problems are exacerbated by carrier branded stores lacking a compelling music selection and handset manufacturers whose music applications are difficult to operate.

Forrester also partially blames music labels for being too focused on direct revenue gains (the sale of a song) and not recognizing the benefits of indirect revue gains (the marketing value of more people hearing their catalog). One of their recommendations is for handset makers and carriers to be a bit more agnostic in their approach, making music more universally playable and shareable across many devices.

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14 Aug 2009
1

iPhone Garners 32% of Global Handset Profits By Hans Erickson in Case Study, Mobile Development, Mobile Development News

The iPhone has propelled Apple to the number one spot in global handset profits.  Apple has posted 40% operating margins which is far ahead of their next closest rival, RIM, which has posted closer to 20% operating margins, and is 4 times higher than Nokia, LG and Samsung’s roughly 10% margins.  bernstein-250x278These numbers seem to vindicate Apple’s strategy of focusing solely on one phone model in contrast to it’s competitors who make several models with slightly different features.  Of course their success isn’t due to this alone.  They had the advantage of being the first to create an entire app store ecosystem and their iPhone OS remains one of the more user friendly in the marketplace.  Combine that with their tight integration with iTunes and other Apple hardware and software and it’s easy to see how Apple has won their current position.  That and some shrewd business moves like garnering industry high percentages through its exclusive contract with AT&T.

It still remains to be seen which model will prevail.  Android seems poised to give Apple a run for its money reminiscent of the Apple vs PC battle of the 80’s.  Will tightly linked and controlled software and hardware win or will an OS licensed, or in the case of Android freely distributed, on any device by any manufacturer prevail?  We’ll see.

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30 Jul 2009
1

iPhone Developer Finds Success in Lite/Free App By Hans Erickson in Case Study, Mobile Development

The creator of the iPhone application iCombat has reported getting conversion rates far greater than the norm.  In his post titled Just How Much Does a Lite Version Boost App Sales he reports global conversion rates of almost 9%, or 7% after being adjusted to account for downloads not driven by the lite version.  Here is a chart of his findings:

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This is much higher than what many application developers find upon releasing a lite version.  More typical is something in the range of .5% to about 5% as is detailed here and here.  Unfortunately there is no clearly presented reason for these higher success numbers.  We’re left to wonder.  However, he does have some nice takeaways for other app developers:

1. Should have released lite version from the beginning – There was no point to waiting and sacrificing the initial new release buzz.  Since it is harder to get featured once your app is launched, say for app updates, it is important to strike early and hard with your app release.

2. Lite does NOT cannibalize sales – If your app is a gimmick then it might not make sense but in all other cases it only helps to increase sales (see our previous post on this topic)

3. Get the bugs out for your lite release – users churn lite apps and are fine giving you 1 star if they don’t like the experience.  This is especially bad because the App store prompts users to rate an app when they try to delete it

4. Lite sales trail off too but paid sales remain higher – if you don’t have the x-factor that is needed to spread the word your lite downloads will fall as they have for iCombat, but in our case paid sales have continued to sell at a minimum rate several times higher than the pre-lite period

5. Frequent releases do juice downloads – Pocket God and other frequently updated apps have benefited from a weekly sales bump as they show up in the new releases section of the app store (users also like this episode style model)

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