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The app development world has become a thriving ecosystem with countless opportunities for creators and entrepreneurs. Whether you're a seasoned developer or just starting in the industry, the primary question is likely, "How can I make my app a revenue-generating success?"
To answer that question, we need to embark on a journey through the intricacies of app revenue models, the pivotal role of performance, and the profound impact on user satisfaction. These elements together form the cornerstone of achieving monetary success in the competitive world of mobile applications.
This blog post will delve into these critical aspects, offering insights and real-world examples to empower you to navigate the complex realm of app development confidently.
Why should you care about revenue?
If you're reading this blog post, you already recognize the importance of revenue. But why do we care? Why should you care? The app market is experiencing explosive growth, with an ever-expanding army of developers creating a constant stream of new apps. This trend has led businesses to tap into this potential for immense profits. However, the cost of app development varies significantly and can be expensive. Some apps can be developed for as little as $5,000, while others can exceed millions.
These figures don't encompass ongoing expenses such as app updates, maintenance, and scaling costs. Major tech companies have dedicated teams to manage and scale their apps. Therefore, app developers must strategize how to generate revenue to sustain their businesses and achieve profitability.
Popular app revenue models
In-App advertising: Partner with ad platforms and integrate SDK for ad display.
Success Criteria: Active user base to engage with ads.
In-app advertising is a popular model projected to reach a staggering $472 billion by 2027. With 51% of global mobile users exclusively accessing the internet on smartphones, there's a lot of potential for engagement through activities like gaming, messaging, and shopping apps. Developers collaborate with ad monetization platforms and integrate SDKs to display ads within apps. To fully capitalize on this strategy, you need a substantial user base that regularly engages with your app and ads.
In-App purchases: Users buy features, content, and services within apps or subscription
Success Criteria: Active user base to make purchases
This model allows users to access services like hotel bookings, Airbnb reservations, additional features, and subscription content. To ensure a continuous revenue stream, users must keep returning, remain engaged, and make purchases.
Paid apps: Revenue linked to new user downloads
Success Criteria: User base continuous growth
Unlike free apps, paid apps rely on attracting users who are willing to pay for app access. For consistent and sustained revenue, developers must focus on expanding their user base through user acquisition strategies, ad campaigns, and adopting a mix of revenue models like in-app purchases or in-app advertising.
The common denominator for success across all these revenue models is having a substantial user base that consistently engages with the app. These models will only work effectively with users who return and regularly interact with your app.
Why are my users leaving?
Now, let's address why users might be leaving your app.
- Could it be due to a poor user experience? While that could contribute, many well-known apps with subpar user interfaces still dominate the app store charts. So, it's not the only factor.
- What about design? Indeed, people prefer aesthetically pleasing apps, but if your app provides essential services, even with basic design, people will still use it.
- Could it be an issue with app promotion or improper app placement?
These factors can play a role, but based on our experience and research, the primary reason users refrain from returning to an app is poor performance.
True story @ WalmartLab
Walmart Labs, a technology incubator under Walmart, identified performance issues with their web pages and dedicated a scrum team to investigate. They collected load time data for key pages and searched for patterns. They found a significant correlation between performance and conversion. Customers who converted experienced pages loading twice as quickly as those who didn't convert.
This pattern persisted when analyzing pages by categories. Here, you can see that individuals who didn't convert had to endure a 2- 3-seconds delay.
In the graph below, we see a strong correlation between performance and revenue. For every 100 million seconds for improvement, they achieve incremental revenue growth of up to 1%. This implies that for every 1 second of delay, they lose 1% of the revenue. That's a substantial loss of potential conversion.
This research was conducted 11 years ago and was primarily focused on desktops. However, it is essential to acknowledge that user experience for a seamless experience is continuously rising, especially for mobile.
Truth: your apps need to perform
- 1.3 seconds is all it takes for Gen Z to lose active attention to media;
- 70% of mobile app users will switch or abandon an app for any performance issues;
- 84% of app users will abandon an app if it fails twice.
Common performance-related pain points
Imagine your favorite mobile app. What keeps you coming back? Chances are, it's not just the content; it's the smooth and seamless experience you enjoy. This experience is heavily influenced by app performance. Slow load times, unresponsive interfaces, and frequent crashes can quickly turn users away. On the other hand, a well-optimized app that responds swiftly and reliably creates a sense of satisfaction that leads to loyalty.
The science behind user satisfaction
Imagine you're playing a mobile game that you absolutely love. You're so absorbed in the game that you lose track of time. You're completely focused, and everything else fades away. For example, think about a puzzle game like Candy Crush.
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When you're in the flow, every move you make feels intuitive and satisfying. The game responds instantly to touches, and there's no frustrating lag. Your mind syncs with the game, you're making progress effortlessly, and you're not just enjoying the game—you're in a state of complete engagement.
Let's consider a shopping app. Imagine you're browsing through the app looking for a specific item. The app's search function is lightning-fast, and the product pages load smoothly. You find what you're looking for without any hiccups. In this moment, you're not just shopping; you're in the flow, where the app's performance matches your expectations perfectly. You end up spending a few hundred dollars on cute kids' dresses, thanks to the seamless shopping experience.
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So, what's the link between these two— flow experience and app performance? Well, it's all about how the app responds to your interactions. A laggy app can break your flow.
On the other hand, a responsive and smooth app becomes an extension of your thoughts. It's like a well-choreographed dance where your actions and the app's responses are perfectly synchronized. This alignment generates positive emotions—feelings of accomplishment, satisfaction, and even joy.
A defined and streamlined process that dramatically enhances efficiency
To achieve maximum efficiency in any endeavor, you need a streamlined process that eliminates unnecessary steps, reduces bottlenecks, and minimizes the risk of errors. Product Science offers the world's first platform for proper performance engineering for mobile app developers, from pre-production to production. This includes the ability to visually see your app's performance, automatic instrumentation, AI-driven cloud analysis of app performance, and the first-ever multithreaded performance measurement and trace for mobile apps.
Enhancing performance with PS Tool: strategies and applications
But before showing how the Product Science tool can help you boost your app's performance, let's dive into an example of an app with quests and virtual characters that would help parents motivate their children to go for a walk. Animated videos would involve kids in adventures. But the loading time was so long, and the kids couldn’t wait.
Product Science Tool showed that the video loading was postponed, as it's awaitng the inflation of the view and its readiness for rendering. You can see that the “Exo player” for the video started to load only 5 seconds later, when the video view was ready.
Starting loading content before the view is inflated and ready to render can save a lot of user time.
As a result, smooth user experience—kids are happy, they want to spend more time in your app, share that story with friends, and engagement soars like a rocket. You can turn on in-app advertising, in-app purchases, or other app revenue models.
Here is another example.
Product Science measurement features of Flow stack, indicating that the delay for the scroll audience is due to frequently running expensive functions.
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This checkmark states that checkMembersState(_:) metod takes more than 7 seconds when users scroll through this part.
Our overall recommendation is to avoid performing expensive operations on the main thread whenever possible. This will help achieve a smoother scrolling experience so you can enjoy your social media time without annoying delays.
Leveraging performance analysis for continuous improvement
Continuous monitoring and analyzing performance is crucial for several reasons.
- Regular performance analysis helps identify and address issues that impact user experience, such as slow loading times, unresponsive interactions, or high error rates. This optimization leads to higher user satisfaction and engagement.
- By monitoring performance metrics, developers can catch and resolve issues earlier, before they escalate into major problems. This proactive approach minimizes user impact and reduces the need for emergency fixes.
- Analyzing resource utilization helps identify efficiencies, enabling developers to optimize code, reduce memory consumption, and enhance battery efficiency for mobile devices.
- As an app's user base grows, performance issues can become more pronounced. Continuous analysis ensures the app can scale effectively and maintain a high level of performance under increased load.
- Apps with poor performance are more likely to experience user churn. By consistently improving performance, you can retain more users and reduce churn rates.
- A well-performing app is likely to receive high ratings and positive reviews from satisfied users, which can attract new users and enhance the app's reputation.
In essence, continuous monitoring and analysis of app performance not only maintain user satisfaction but also drive the app's success by aligning it with user needs, improving its functionality, and enhancing its competitiveness in the market.
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