DEVELOPER ATTITUDES to APP MARKETING
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1 DEVELOPER ATTITUDES to APP MARKETING Mobile app developers share their opinions on the state of app distribution and monetization 2013 appflood.com
2 Executive Summary With the growing volume of mobile apps available in app stores and markets, user choice is at an all-time high. At the same time, app development is becoming riskier and developers are finding it increasingly difficult to attract, retain and monetize users effectively. The key findings from this report show app developers, particularly smaller indie developers, are not clear on the benefits of different mobile marketing channels. A lack of clarity and trust in ad network providers are the main reasons why 70% of developers are frustrated with the current state of app marketing. A lack of clarity and trust in ad network providers are the main reasons why 70% of developers are frustrated with the current state of app marketing. Trust was seen as the most important factor in determining which advertising network to choose for app launches while surprisingly, cost was only the third most important factor. Even though trust was the most important factor, most developers felt ad networks were not honest about their revenue claims with 71% of developers expressing the view that ecpm (effective Cost Per Thousand Impressions) was exaggerated. With trust such an integral issue for developers, most were found to be adopting a do-it-yourself approach to app marketing and the majority (78%) spending less than USD$5,000. Smaller developers said they took a chance when it came to app marketing. Developers gravitate towards big name ad networks and service providers in the belief that they can trust these brands, however, the vast majority of developers are unhappy with the results, suggesting a gulf in expectations between themselves and the ad network providers. Ad providers must work harder in gaining back this trust and expanding app developers marketing knowledge. To achieve this, they must be more transparent with their app marketing offerings and provide better tools to help developers to understand and calculate return on investment for their app marketing campaigns. Developer Attitudes to App Marketing 1
3 About this Report The Developer Attitudes to App Marketing report analyses the findings of a survey carried out by AppFlood with the goal to better understand developers perspective regarding the complexities of app marketing. The survey was undertaken across 1022 app developers of varying sizes. Throughout this report we compare results between large, medium and small developers. Large developers are defined as those with more than 51 staff, medium with 16 to 50 staff and small having 15 or under. The survey looks to address attitudes across two segments. The first section is around developers acquiring new users/customers and the second section looks at how developers are making money by publishing advertising inside their apps. About AppFlood AppFlood is a mobile advertising and cross-promotion network for Android and ios developers who want to buy, sell, and exchange users for free. AppFlood enables developers to earn at least 40% more revenue than traditional mobile ad networks. Being completely commission-free also makes AppFlood the most neutral, transparent network in the industry with leading data visibility, campaign controls and deeper insights developers trust. AppFlood launched in July of 2012 and has since acquired over 3,000 developers using its services every day. More information can be found at or alternatively contact info@appflood.com AppFlood comes from the mobile distribution and monetization company PapayaMobile, providing software tools for Android and ios developers to create freemium mobile social games. Papaya hosts games on its self-titled mobile social network which has over 80 million worldwide users. Papaya was founded in 2008 by CEO Si Shen and CTO Qian Wenjie. It has its headquarters in Beijing and offices in San Francisco and London. Developer Attitudes to App Marketing 2
4 Acquiring Users This section looks at developer attitudes towards marketing apps and acquiring customers. Frustration all round Small developers are the most frustrated with app distribution at 72% versus large developers who are the least frustrated at 62%. Overall, the variation is not huge and it appears that across the board developers in general are frustrated with existing app distribution methods. However, greater frustration amongst smaller developers stands to reason as increasingly they have to undertake the role of marketing manager and commercial manager and analyst if they wish to publish and promote their own apps. The complexities that come with analyzing customer acquisition campaigns through the use of in-app analytics and other tools means that the average developer may lack the necessary skills to do this and thereby acquire customers optimally/effectively as well as monetize those that have already been acquired. In contrast, larger developers have access to greater resources and so can spend more time and effort on test campaigns as well as analyzing the results. One developer described their experience in frank terms. Mobile Advertising in general is a huge pain in the ass. Have you ever felt frustrated with app distribution? Big developer Yes Medium developer Small developer No Developer Attitudes to App Marketing 3
5 Majority have paid for mobile advertising Overall, the majority of app developers surveyed had tried mobile advertising to acquire customers. Medium sized developers seem to have used mobile advertising the most at 65% versus large developers at 61%. It is no surprise that small developers lag behind at around 50%. Have you ever used mobile advertising to acquire customers? Big developer Yes Medium developer No Small developer Developer Attitudes to App Marketing 4
6 Small developers rarely spend $5,000 or more on app marketing Whilst small developers have the smallest allocated marketing budget with 88% having under $5,000, it was very surprising to see that the medium sized developers actually have higher budgets allocated than the large ones of whom 48% have allocated $5,000 or under. Smaller developers often cited worry in losing too much money when starting out and having nothing to show for it as the primary reason for their reluctance to invest more in marketing. One small developer explained, I am just getting started in mobile advertising. It has been a learning experience. What was your allocated budget? Big developer Medium developer Small developer $10,001+ $5,000-10,000 $4,999 or less Developer Attitudes to App Marketing 5
7 Mobile CPC is still the most popular paid acquisition channel The most popular acquisition tool for all three groups was cost per click ad network (CPC) with 51%, 55%, and 58% of small, medium and large developers respectively saying they had used it ahead of install networks. Most surprisingly though was the high instance of web advertising and site sponsorship across the three groups with 42%, 53%, and 56% respectively having paid for site banners, sponsorship or takeovers. This is surprising considering the difficult nature of tracking conversions from web to mobile. This route does have brand awareness value, but this might be difficult to justify for most developers, considering the high cost per acquisition. Most developers are still not investing in using a specialist PR agency or cannot currently see the value. Double the amount, or 18% of large developers had used a PR agency versus 9% of small and medium developers. Which marketing methods have you used to acquire customers? App review website Specialist PR agency Cost per thousand Cost per click Site sponsorship Traffic exchange Non-incentivized installs Incentivized installs Big developer Medium developer Small developer Developer Attitudes to App Marketing 6
8 Trust is the biggest determining factor in choosing a marketing service The overwhelming factor that determined which network or service to use was trust. Being able to trust in a provider to deliver positive results at an appropriate price is most important to large developers of whom 57% said it was a key factor versus 47% of small and medium developers. Trust and prior awareness of a service seem to be the key determinants across all three groups for choosing a network or marketing service, but the service that gave the cheapest cost was also important to all three. Of the three groups, small developers take the biggest leap of faith with 26% of them saying that they had simply taken a chance versus 18% of medium and 11% of large developers. How did you decide which network or service to use? (Advertisers) I took a chance An agency managed it for me and I left them to do it I used a service that was recommended to me by someone I trust I used a service that promised the most installs I used a service that I know about the most Gave me the cheapest costs/maximum return on investment I used a service I trusted 20% 40% 60% 80% 100% Big developer Medium developer Small developer Developer Attitudes to App Marketing 7
9 Small developers feel users acquired were not good value for money. Small developers expressed the highest degree of dissatisfaction regarding the value for money of acquiring customers, with 53% saying it was too expensive versus 33% of large developers. Large developers are likely to be the most satisfied as they have the resources and skills to acquire customers more effectively and to be more analytical in their approach. Do you feel that users you acquired were good value for the money? Big developer Medium developer Small developer Cheap, a bargain Priced just right Too expensive On starting out in app marketing, a small developer explained [The challenge is] figuring out how to get started without losing a lot of money in the beginning. Another echoed this sentiment, saying, Just money disappearing rapidly and not getting any results... the usual. Developer Attitudes to App Marketing 8
10 Most developers are managing their own campaigns Many developers are choosing to manage their own campaigns in house (versus using an external agency). This is still the case with larger developers, 70% of whom still manage their own campaigns. Over 80% of medium developers managed the campaigns themselves which is surprising as they had more generous budgets allocated for app marketing. Did you or someone in your company manage the process of booking the advertising and monitoring it? Big developer Yes Medium developer No Small developer Developer Attitudes to App Marketing 9
11 Behavioral and ROI data is still not clear enough Clicks, impressions and installs are generally felt to be clear. On a scale of 1-5 how clear was the information that you received on the following advertising metrics? LTV (lifetime-value of customers) ROI (return on investment) Retention Min. bid per publisher ecpm per publisher Installs Click through Rate (CTR) Ad Impressions Clicks no information 5 - full information Developer Attitudes to App Marketing 10
12 Publishers This section looks at how developers have monetized their own apps by acting as publishers. Over half have monetized through ads Pretty much all three groups are equal in their response to having used an ad network to grow ad revenues with 54%, 58%, and 57% saying yes respectively. Those developers that didn t employ mobile ads in their games felt the revenue earned was not enough to justify the additional annoyance. One developer stated that mobile ads generated so little per month. It s just not worth annoying people with ads. Have you ever used an advertising network to grow revenues? Big developer Medium developer Yes No Small developer Developer Attitudes to App Marketing 11
13 Trust is also the key decider for publishers Trust was the main factor in selecting a network for medium and large developers with over 66% citing it as a key decision making factor. Once again, small developers are overwhelmingly leaving things to chance, at 22%, versus 9% of medium developers and 10% of large developers. How did you decide which network or service to use? (Publishers) An agency managed it for me and I left them to do it I used a service that was recommended to me by someone I trust I used a service that promised the most installs I used a service that I know about the most I used a service that gave me the cheapest costs/maximum return on investment I took a chance I used a service I trusted Small developer Medium developer Big developer Developer Attitudes to App Marketing 12
14 App developers generally do not trust revenue claims Overall, medium developers are the most dissatisfied with the ecpm* claims of networks, with over 80% citing they felt they were exaggerated versus 70% of small developers and 60% of large developers. Large developers are therefore the most satisfied of the three groups. Developers stated that ecpms would be used to lure them in but these would often only last for a short period before falling. One developer said, To get customers, most of the ad networks use a dishonest way of promising high ecpms and delivering it - but only in the first month. Then results become worse and worse every month. Have you ever felt that the ecpm claims for a network were exaggerated? Big developer Yes Medium developer No Small developer Developer Attitudes to App Marketing 13
15 Conclusions Currently, developers instinctively gravitate towards big name ad networks and service providers in the belief that they can trust these brands to offer an effective app marketing service. However, the fact that the vast majority of developers especially smaller ones - are also unhappy with the results achieved relative to the cost suggests a gulf in expectations between themselves and the ad network providers. To properly earn the trust of today s cost-conscious developers, for whom meaningful results and a positive ROI on their marketing investment are a priority, ad providers must be prepared to be more transparent with their app marketing offerings - especially around campaign planning, reporting, and measurement. One Indie app developer sums up their struggle in personal terms, I put more money in than I see returned. [It s a] Sad story for an Indie developer who is struggling to support his family. Developer Attitudes to App Marketing 14
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