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The App Economy In Australia

With the meteoric rise of the mobile-first world, the app ecosystem has emerged as the primary interface in which we spend a huge portion of our time, and increasingly our money. According to Nielsen, 85 percent of our smartphone usage is in-app, equating to around an hour/day in Australia. We have witnessed a fundamental shift in media consumption, considering the channel was non-existent less than a decade ago.

Products, brands, developers, media, agencies and of course the app stores have commercialized the app ecosystem in an enormous way over this time, with global mobile app store revenue reaching $51 billion in 2016. The app ecosystem is predicted to surge on, with app store revenue forecast to double by 2020 given a sharp 138 percent increase of installed smartphones in the same period (App Annie).

Of course, the vast majority of these 3.6 billion additional smartphone users will come from emerging markets across Asia and South America, where smartphone costs are falling to feature phone levels.

We, therefore, have to wonder where this leaves mature markets such as Australia, and how mobile stakeholders will sustain the growth seen in recent years.

Let’s take a look at some likely implications of the changing app market locally:

A greater focus on App Search Marketing (ASM)

The mobile industry to date has enjoyed the proliferation of the ‘app install’ channel, with apps able to buy high volumes of installs very efficiently. Whilst, in many cases, this remains an effective tactic today in influencing user acquisition and for chart boosting, it is likely that these paid installs will become gradually more expensive, with the plateau of install volumes in mature markets.

Chart position, however, remains critical with 65 percent of us only using 1 app in a single category (Global Web Index 2015), and apps will need to begin building upon their traditional ‘app install’ buys to maintain visibility.

It follows that we’re likely to see a greater focus on both paid and organic ranking efforts within the app stores. How?

  • App Search Optimisation (ASO) has evolved to organically improve apps’ visibility in the App Stores, via unofficial levers which play to Apple and Google’s store algorithms.
  • Concerning the Android operating system, Google attracted a lot of attention in 2015 for launching its paid Google Play search product to improve apps’ positioning against relevant keyword queries (outside of the top charts).
The battle for gross revenue share between category leaders

Referring again to the emerging reality of consumers only using 1 app per category, it is clear that the well-established apps appearing above the fold in charts and search results are going to have a very distinct advantage in future.

With overall app usage still increasing despite the app install plateau, there’s an opportunity for these established apps to move out of user acquisition, into the in-app revenue growth phase.

Increasingly, we’re seeing non-gaming categories feature in the top grossing charts via in-app purchase (outside of Candy Crush ‘extra lives’). The main examples of this currently are via subscription (e.g. audio streaming apps) and additional product access (e.g. dating apps offering additional interaction).

Prepare to see more dominant apps experimenting with new in-app purchase models.

The growth of app re-engagement

Although acquisition remains pivotal to most apps, for many there is an increasing focus on how best to monetise existing active users. One of the leading attribution providers in the Australian market, Tune, has noted that just 13 percent of users remain active beyond a week of installing an app.

Re-engagement technology is hence set to increase in demand.

However, app re-engagement is not only being used to retarget lapsed or dormant users. Upselling high-value spenders, pushing promotional or seasonal campaigns, and cross-promotion are also emergent strategies.

Mobile market leaders including Facebook and Google have released new ad products in 2015 to improve their re-engagement process, facilitating deep linking and post install measurement in social and search (e.g. Google’s App Streaming and App Indexing).

In a recent case study published by app re-engagement specialist Remerge and attribution provider Apps Flyer, re-engaged users drove a 62 percent lower cost per lead than acquired users. Of course, a possible re-engagement scale will vary, however, the growth indicators are promising. Ad Roll’s 2016 State of the Industry suggests that 87 percent of marketers plan to increase mobile re-engagement investment in 2016, with 82 percent of marketers already leveraging the channel.

Cross-screen potential

The mobile app economy has traditionally been fuelled by direct response advertising, with the Australian market focusing heavily on acquisition efficiency and attribution technology integration in recent years.

With the leading operating systems gaining scale across multiple devices (i.e. smart watches, connected TVs, tablet computers) greater potential for brand advertising presents itself. The ability to reach a single user across all of these devices has been a well-trodden industry mission – and one that the app ecosystem can accomplish.

Hence, despite the success subscription services such as Netflix have seen in the past 12 months, it is highly possible that apps existing across multiple channels will branch out to experiment with ad-funded models.

In a nutshell, mature mobile markets face a changing app economy, however, there’s every indication that there remains considerable potential for further growth. Both usage and technology are on our side domestically, as the app ecosystem plays a crucial role in further connecting us globally on the road to 2020.

Bachelor of Information Technology (Mobile App Development)

The Bachelor of Information Technology (Mobile App Development) course at Federation University @ ATMC Melbourne and Sydney examines – The degree will place a student at the forefront in this industry with a particular focus on developing apps for mobile platforms such as Android – the most popular mobile operating system in the world – as well as the security implications of mobile development.

The degree has been designed to provide the student with the key IT knowledge and skills they will need in the workplace. they will obtain a core of basic skills, common to all branches of IT, while at the same time developing extensive expertise in wireless mobile communications, cloud computing, programming, system architecture, design, user experience, networking, and security.

Below portals help in searching relevant jobs in Australia:

https://au.indeed.com/
https://www.seek.com.au/

Source Link: http://www.bandt.com.au/featured/future-app-economy-australia https://study.federation.edu.au/#/course/DCT5.MAD

 

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