Mobile App Success: How Much Can It Really Cost?

Topic: Books, Mobile Apps | Author: Peggy Anne Salz | Date: February 18, 2014

apponomics app bookCountdown to the launch of Apponomics: The Insider’s Guide To A Billion Dollar Business, the definitive book on how app developers can make money with their apps. The free book — which I have researched and written in conjunction with InMobi, the world’s largest independent mobile advertising company —provides best practices and tips from the industry experts to help you improve your chances of success across all the stages of your app business.

Drawing from real world case studies, developer interviews, and in-depth research, Apponomics is THE ultimate app book that can help YOU, the developer, navigate the complexities of the app world. To get you as excited about this book as I am, here is an excerpt that tells you exactly what you  need to have top of mind in order to plan — and stick to — your budget.

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Mahak Sharma, InMobi Business Developer Lead, Mobile Gaming, provides advice to app developers across three broad app categories: Games, Social and Utilities.

Games: There are two broad factors that will decide your advertising budget: your production costs and the number of networks/channels you target. Obviously you can spend more on advertising than you spent on the production of your gaming app. That is bad business. Generally speaking, InMobi has observed that marketing budgets hover around 20% of production costs. While the exact amount can vary depending on the studio size and the game genre, this is a good rule to follow.

It’s quite inefficient to split your spending across too many ad networks. You optimize your spend by carefully choosing 3-4 ad networks with the proven capabilities (targeting, geographic focus, wide publisher network) to reach and engage your target audience.

Once you have decided how much you want to spend (say, 20%-30% of your production budget), then you need to distribute it among your chosen ad network partners. Of course, the exact split will depend on your business objectives.  (It makes sense to spend more with an ad network partner that has a strong presence in China, if your strategy is to release your app there.) InMobi generally recommends that app developers plan to spend at least US$200 in each market with each ad network.

But you should also not be afraid to experiment.

In a space where 40+ ad networks are competing for your spending it’s a good idea to earmark around 10%-20% of your total marketing budget to ‘test’ different ad networks and the results they deliver. If the results are positive, then you can partner, but be selective. Many studios developers spend 80% of their budget (20-30% of their production costs) on 2-3 ad networks they trust and then the remaining 20% is distributed among up to 8 networks to see how (if) they really perform.

Social: Apps in this category thrive on viral sharing and word-of-mouth. Initially, your spend will be low as you seek to build and understand your audience. But things change drastically when you enter the Scale stage of your app life-cycle. InMobi has observed that app developers generally spend 40%-50% of their revenues to grow their app business. How much you spend will depend on your appetite for market share and the money you want to make in the process. Large communications and entertainment apps like Spotify spend millions, but it has also become the leading social/music/sharing app on the market. Of course, not every app developer is a market giant or is pursuing a strategy to be one. Count on spending US$200-US$300 per ad network per market minimum.

Utility: Similar to social apps, your focus on advertising comes in the Scale stage of your app life-cycle. What you spend depends on your ambitions (and your revenues). Let your business plan be your guide and factor US$200-US$300 per ad network per market into your algorithm for app success.

For more tips, tricks and solid app business advice join us at MWC for panels and sessions that cover key topics including: advanced targeting, customer lifetime value (LTV), monetization, optimization and everything you need to know to acquire high quality users at scale. Check out the complete program here. 

My take:

I am proud to have produced a book together with InMobi that equips app developers with the practical advice and expert insights to compete — and win — in the competitive app space. Apponomics is my second app book (following on from The Everything Guide to Mobile Apps: A Practical Guide to Affordable Mobile App Development for Your Business (F+W Media Inc.) and — importantly — marks the first time InMobi has chosen to share its six years of invaluable insights on the app business.

Over the next weeks and months MobileGroove will be your destination for content and interviews related to the book and its key takeaways. You can also watch #apponomics for tweets and updates around the content and contributors that helped make this amazing knowledge resource possible.

You can pre-order to receive a PDF copy of Apponomics by clicking the box below.

Apponomics book download

 

My personal thanks to the expert contributors for their insights:

  • Anton Soeharyo, Touchten
  • Chien Ming Liang (Leon), Orange Nose Studio
  • Daniele Rati, Madbit Entertainment
  • GameVil
  • Harvey Elliott , Marmalade Technologies Ltd
  • Ippei Fukami, CyberZ
  • J2 Interactive
  • James Cooper, Soko Media (MobyAffiliates)
  • Jonathan Cohen, Agency of Trillions
  • Matthaus Krzykowski, Xyo
  • Meeta & Dishant Shah, Eflashapps
  • Mickey McManus, MAYA Design
  • Norm Liang, Go Launcher
  • Peter Hamilton, Has Offers
  • Rajeev Nagpal, Tiny Co
  • Stefan Damasena, Alegrium
  • Storm 8
  • Sven Ossenbruggen, Xyrality
  • Toni Fingerroos, Fingersoft
  • Tony Pearce, gamesGRABR
  • Tyler Bell, Factual
  • Yusuf Goolamabbas, Animoca

Personal thanks also to Arun Pattabhiraman, Shrikant Latkar, Innu Nevatia and Mahak Sharma for their hard work and dedication to the project. And a huge round of applause for the entire InMobi team (Abhishek Bapna, Anne Frisbie, Chris Davies, Ed Laws, Jayesh Easwaramony, Jessie Yang, Julia Giona, Krishnendu Majumdar (Krish), Mike Cohen, Pankaj Bengani, Rohan Choudhray, Ryan Merket and Seungyeon Kim) for sharing their finely tuned best practices based on working with app companies and customers — ranging from large developer studios that make hundreds of millions of dollars annually, to much smaller app developers who fight for survival with minimal marketing — to benefit app developers every size and scale, everywhere on the planet.

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