In business, the start of any new year, let alone a new decade, is filled with anticipation, from planning ahead for the challenges to working out how to grab the opportunities. The App Annie 2020 State of Mobile report put total worldwide app store consumer spending at $120 billion last year. There’s been a lot of change and growth in the industry, from a surge in gaming to video wars to blockchain technology and IoT. Mobile trends continue to define the market.
But what about the people who work in the app business? We asked four industry professionals, including our CEO, Paul Larbey, what they think will rock the app world in 2020.
What is the biggest challenge app developers will face in 2020?
Kristian Pechovski, Business Development Manager at Telecoming: Daily, we face many challenges, but perhaps the most important one for us is adapting the products locally. We've seen great results when our apps meet consumer needs in each market. Understanding user habits and cultural differences before launching any app is a crucial piece of our strategy. For a small team, to manage business opportunities globally is a masterclass. We work hard on analyzing which countries we should prioritize among others.
Noemie Hernandez, Director of User Acquisition at PlayQ: Over the coming year, we believe industry consolidations will continue, meaning big mobile game developers such as Playrix, Zynga (or Applovin) will keep buying smaller publishers. This is simply because competition keeps growing, which makes it very difficult for small developers to be competitive against the big budgets of the leading developers.
Aykut Karaalioglu, CEO at MobileAction: Since app store optimization is a practice that’s recognized by most app developers, increasing visibility by organic methods becomes more and more challenging.
We believe recommendation will be more crucial for the apps to be discovered in the marketplace. As the store algorithms become more complex each year, even the small-scale developers will need advanced keyword optimization tools to cope up with the intensive competition. On the paid side, creative ad optimization is getting more competitive as the brands, especially games, focus more on video and playable creatives. Keeping track of the competitors' ad creative changes and important campaign metrics to understand their strategy will be essential to achieve a high ROI.
Paul Larbey, CEO at Bango: An ongoing challenge facing app developers is the fact that platforms such as Facebook are opaque when it comes to defining an audience. Both Facebook and Google claim their black-box machine learning algorithms will find you the right users. This is great if it works and much more simple for new or inexperienced users. However, it takes control away from experienced marketers who want to be able to test, refine and easily adjust their campaigns.
What do you think is the biggest opportunity in 2020?
Pechovski: The rise of consumer trust in the new monetization models is definitely a great opportunity. Users place their confidence in Apple or Google's payment methods. That's certainly something that we, as developers, appreciate a lot. Psychologically, it's easier to use your phone to consume digital goods rather than introducing the card.
Hernandez: Monetization and hybrid monetization (in-app purchases and adverts) are on the rise, which means it is now possible to make money in low tier geographies that typically have low in-app payments. We think that Western gaming companies will finally start acquiring more international users, realizing the potential of large audience geographies such as India.
Karaalioglu: Apple Search Ads is broadening its reach every year, and early adopters of it will have a tremendous opportunity over the others. Since Apple Search Ads will surpass many organic results and appear at the top, those who invest time in building the right keyword strategy for Search Ads will reap the fruit of it. Apart from that, using the right campaign management tool to optimize Apple Search Ads will give a great advantage to those who wish to ace the paid growth.
Larbey: Reaching a smaller audience of more relevant users is being recognized by app developers as offering more value than mass marketing. This personalization of the ads will see smaller audiences being used in large platforms such as Facebook and Google and the growing popularity of emerging ad marketing platforms such as Tik Tok which has already begun to shine as a leading key to Gen Z.
If you could change anything in the app developer world, what would it be?
Pechovski: Changing the developer mindset into understanding that sometimes less is more. Companies should focus on finding niches and take advantage of them globally. The scalability of the business may certainly have a limit. However, your core user base will be much more loyal if you work retention. For example, an app tailored only to fishermen would most probably have a smaller but much more profitable and loyal user base than a new social network for Gen Z… Sometimes we get caught up in becoming the next Tinder or the next Instagram, but in my opinion, really simple ideas can bring great profit.
Hernandez: One thing we would love to change is creating a more tailored experience, depending on user segmentation. Some apps are very good at it, but in general, most app developers look at volume or quantity more than quality - and I reckon getting closer to the customer can be key for user retention, especially in such a competitive market.
Larbey: It would be great to see a change in the app developer mindset that getting as many people as possible to install your app will mean more in-app purchases. This is not the best route to monetization. Overlooking vital characteristics, including the user’s ability to pay and history of paying in apps, makes this approach highly inefficient and reliant on the law of averages. You end up spending a lot of money on marketing, and you don’t see it reflected in your ROI.
App marketers who take a smarter approach to acquire paying users add the vital behavioral payment segmentation to their marketing campaigns. This is proven to increase the conversion of paying users. This also benefits users who see more relevant ads rather than being bombarded by ads from the companies with the largest marketing budget.