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App Meter – Q2 2011 Emerging patterns in consumption in the mobile app economy Patrick Mork
App Meter – Q2 2011 Emerging patterns in consumption in the mobile app economy Patrick Mork
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Introduction ........................................................................... 3
Methodology ................................................................................................................. 3
Executive Summary ................................................................ 4
Detailed Findings ................................................................... 7
App Consumption ....................................................................................................... 7
When are consumers using apps? ..................................................................... 11
Apps: The case for brands and advertisers .................................................... 12
Discovery and App Stores ...................................................................................... 15
Conclusions ................................................................................................................. 17
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Introduction Welcome to App Meter! This market research is designed to give us a snapshot of where the app industry is headed and will be conducted 2-‐3 times per calendar year. App Meter will focus on both what’s happening from an industry, revenue and platform point of view as well as what is happening on the consumer front. The data sourced for App Meter comes primarily from GetJar’s consumers, publishers and partners and presents only a view of apps from our perspective. As one of the world’s largest app stores with 1.7 billion downloads to date, GetJar can offer a perspective on what is happening in the space although this can’t be generalized beyond what is happening in our ecosystem.
Methodology This issue of App Meter is focused on consumer trends and demographics. Our goal with this research was to get a better understanding of what consumers are downloading, which platforms they want to use, how often they use apps, barriers to downloading apps and consumer opinion of advertising within apps. Our methodology was to conduct an online survey targeting GetJar’s database of 25M users in over 190 countries. The survey consisted of 30 multiple-‐choice questions and was distributed to consumers globally. In terms of demographics and response rates:
• 2,500 fully completed surveys • 90% male respondents (70% male for the Americas) • Age demographics:
o Less then 18: 1.5% o 18-‐25%: 28.2% o 26-‐35: 38.8% o 36-‐45: 19.3% o 46-‐55: 8.1% o 56+: 4%
• Geography: o Americas: 25% o Europe, Middle East & Africa (EMEA): 26% o Asia & Australia: 49%
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Executive Summary The first thing of note from our research was the enormous momentum behind the Android platform. Android’s growth the past year has been well documented and we’ve seen a 500% growth in submission of new Android applications to the GetJar store over the same period last year. Today, Android ranks 2nd only behind Java as the largest platform by submission of new content to the GetJar system. In our research, 18.2% of respondents acknowledged having an Android device, which was 3rd after Symbian (31.7%) and Java (23.1%). The strength of Java and Symbian on GetJar is a legacy of our international business and particularly how strong our Asian business has become. However, turning to the Americas and Europe, 34.9% of respondents were Android users in the former and 31.8% were Android users in the latter. When we look at the source of our downloads we see a similar pattern: Android is gaining significant ground in developed markets like the United States and Western Europe as well as some more developed countries in Asia most notably S. Korea and Japan. Of more interest was what platforms consumers’ were considering with regards to their next handset. Here the situation changes even more.
A whopping 40% of consumers across our survey suggested their next handset would be an Android phone vs only 17.9% going for iPhone. Less then 9% responded they would stick to what they have and alarmingly, only 8.2% envisioned a Blackberry as their next device.
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Another interesting finding was related to consumer use of applications. Our research confirmed that not only are app downloads per user increasing but so is usage compared to other forms of media. For example, over 63% of consumers on GetJar were downloading apps at least once a week with 28% actually downloading apps every single day. More importantly, app downloads were also resulting in usage. 57% of respondents were actually using apps more then once a day and on average 33% of consumers were spending 1 hour or more using their mobile applications each day. When we compared app usage vs. traditional forms of entertainment like TV we found apps were actually closing the gap. Only 49% of consumers surveyed actually were spending more then 1 hour a day watching TV for example. Mobile has also started to slowly erode the hold of the Internet on app consumers. The survey revealed that among GetJar users, 30% now claimed to be using mobile Internet more then Internet on their computers. However, not all apps are created equal. Naturally, there are apps that consumers deem more important then others. Although over 600,000 apps exist among the top three apps stores today, the reality is that a small number see significant traffic in terms of downloads and an even smaller number actually see repeat usage. When we asked consumers how many apps they were using at least once a week, nearly 40% said they used 3-‐4 apps a week routinely vs. only 10% saying they used 10 or more apps over the same time period. The challenge for publishers and agencies is to make apps that are not only good but that consumers keep using. Therefore, getting an app out there and getting it installed is only the first step to building relationships with consumers on their mobile devices. What consumers’ are telling us and what we’ve seen really over the past 5 years is that the true winners in the mobile app space are not only those who make good apps, but those who routinely improve and re-‐promote themselves to consumers to make their apps an indispensable aspect of their lives.
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Unsurprisingly, the research also clearly demonstrated that as the number of apps available increases that discovering and finding the right apps is also becoming more of a challenge. Although over 60% of consumers responded that they were pleased with the current App Stores they were using, only 25% admitted to using App Stores for discovering the latest apps. Nearly 50% of respondents mentioned browsing the web as a preferred method for finding new apps with 16% saying that they also found great apps through recommendations by friends or by using social media. Last but not least we delved into the evolving role of advertising in mobile apps and tried to get an understanding of how consumers felt about in-‐app advertising and more importantly how they felt about their favorite brands trying to reach them through mobile apps. The results here were pretty encouraging. Not only did 72% of consumers claim to have downloaded apps with ads in them but nearly 60% of these users claimed they would repeat the experience again. By and large, the most important things consumers were looking for in these mobile ads were specific information (34%) or news about new products and services (31%). We also found that a majority of consumers had already downloaded some form of branded application (52%) in the past but that the expectation of these consumers regarding the quality of the branded application was pretty high. Clearly, brands that dive into the app space without having a quality application risk damaging consumers’ perception of their brand. Nearly 80% of consumers surveyed stated that the quality of an app affects the brands trustworthiness.
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Detailed Findings
App Consumption App consumption among the target audience was fairly high. 28% of consumers downloaded apps every day with 19% of downloading multiple times a day. Very few consumers could be considered “light” users and only 6% were downloading apps less then once every 3 months. Usage of apps once downloaded was also fairly high as mentioned above. However, one of the interesting findings was the difference in download patterns between regions. Asians had a tendency to download apps more often then Americans or those from Europe (29% downloading once or more per day vs. 19% of Americans or 22% of Europeans doing the same). However, usage among American consumers was slightly higher then the other regions with 74% of consumers stating they were using their apps one or more times per day vs. 71% stating the same in Europe and 65% in Asia. There were also some differences when we looked at how long on average consumers were using apps. Across regions, consumers spent nearly 34% of their time using apps for 1 or more hours with the majority (31%) spending 10 – 30 minutes using apps.
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Yet, once we look at the regional picture we see changes in terms of how long consumers in certain regions are using apps. Americans and Asians tend to be heavier users of apps in terms of the duration per session with 35% of US consumers using apps for sessions of 1 hour or more. Asians are close with 30% using apps as heavily. However, Europeans have shorter sessions with only 22% of Europeans spending 1 or more hours using their apps. We also thought it would be of interest to measure app sessions against more established forms of media such as TV. Although consumers by and large are still spending more time watching TV versus using apps, we found that among GetJar’s app consumers the difference wasn’t as striking as we would have thought. In fact when we looked at moderate users as defined as a person spending 31 minutes to an hour per day using Apps or watching TV, the numbers were nearly identical with 20.3% watching TV for that period of time vs. 23% using apps.
The other item of note was the differences in the genres of apps used in different regions. Although one might assume consumers are typically interested in the same type of apps across regions, this was only partially true in the resulting survey. Overall, games, social networking, productivity and entertainment were the most popular categories of interest when we asked consumers what type of apps they found most useful and downloaded.
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However, we found some interesting differences from region to region in terms of what consumers were downloading. Notably, Americans seemed much more interested in downloading News, Weather and Sports apps compared to consumers in other regions. Specifically we found:
• 46% of Americans downloaded and used Weather apps compared to 34.5% of Europeans and only 20% of Asians
• Nearly 48% of Americans downloaded and used News apps vs. 40% of Europeans and 36.7% of Asians
• Sports was markedly more important in the Americas and in Asia with 21% and 20% respectively of consumers using sports apps compared to only 13% of Europeans using / downloading this type of content.
One final point of difference among regions was consumers’ usage of Security apps. Undoubtedly, this will likely increase in the US given recent scares with malicious Android apps but one item of note was how little interested US and European consumers were in downloading or using Security apps in general. Asians seemed to place a fair amount of importance in downloading and using these types of apps with nearly 39% of Asians using them. In contrast, only 17% of Americans and 18.6% of Europeans showed similar interest.
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Overall interest in apps by genre in the US was as follows:
Lastly, we decided to try and also gauge what consumers’ were going to look at downloading or using in 2011. Across all three regions Productivity, Games and Entertainment came out strongly with the US and Europe giving priority to the first two genres. In Asia, however, Games is the most interesting category for consumers followed by Social Networking and Entertainment. This makes perfect sense and further reinforces our research from last year where we found that the mobile device is really becoming the entertainment and communication tool of preference for Asians. Particularly, when one looks at the low penetration of fixed broadband and Internet access in markets like Indonesia and India, the mobile phone becomes the logical tool of choice. In cultures like that of India and Indonesia where the family and the concept of the extended family are culturally more important then in the US and Europe, keeping in touch with loved ones is vital in people’s daily lives. It’s important to keep in mind that apps like Facebook, Twitter, ebuddy and others not only help families and friends stay connected but also help families keep in touch with others living abroad. This is especially the case when considering how important these apps are at keeping the cost of this communication to a minimum. Sharing photos, sending instant messages and voice-‐over-‐IP calls are all extremely inexpensive for consumers when compared to the ordinary cost of making long distance calls.
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When are consumers using apps? One of the things we were interesting in discovering was whether there was any particular difference on “when” consumers were using apps. Did the time of day or the day of the week make a difference? Were consumers more likely to use apps at night after work when they had some time? Were they more likely to use apps on weekends maybe as a way to relax? App usage by day really didn’t vary significantly as we can see from the chart below. App usage was fairly constant with 70% plus of users using apps nearly every day. As we would have anticipated app usage was slightly higher on weekends with over 80% of consumers using apps on Saturday and Sundays. When we looked at app usage across regions by day we didn’t find anything very unusual either. The only thing of note here was that Americans used apps more consistently day-‐to-‐day. Over 79% claimed to use apps nearly every day and 85% actually used apps on Fridays.
Subsequently what we looked at was whether there were any major differences regarding the times of the day when consumers used apps. Overall, the patterns were fairly similar with usage being fairly even throughout the day and increasing in the early evening. Two interesting differences emerged here. First, Americans were more prone to use apps during the middle of the day (before, during and right after lunch time) with 48% saying they were using apps during this time of the day compared to 41% of Europeans and 40% of Asians. Second, we found that Asians were typically more likely to use apps late at night.
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55% stated they used apps late at night compared to only 34% of Americans and Europeans.
Apps: The case for brands and advertisers Naturally, when any new medium comes along the first question among brands and advertisers is what will the impact of this medium be on their business? Is this something as big as the Internet or is it just a passing fad. What we see here is clearly that apps don’t seem to be going away anytime soon. If anything app usage as measured by most key metrics continues to soar. Let’s just recap some key data taken from my presentation at SXSW last week:
• Over 8 billion downloads done last year alone • More then 600,000 apps available • Nearly 120 different app stores available globally • 35% of Americans used apps in January of this year (Comscore) – up 3%
from December 2010 • Almost 66M Americans had smartphones during the same period
Lastly, it’s worth noting that the most popular apps today are reaching far more consumers then even the most mainstream TV programs. For example, Shazam now has over 75 millions users, Angry Birds has done over 100 million downloads and ebuddy (the popular messaging app) has done over 60 million downloads on GetJar alone.
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But the question we wanted answered was “Ok, but what does this mean for brands and advertisers?” The survey clearly showed that the apps world presents clear opportunities for brands and agencies but also several important challenges. First, it wasn’t clear that brands have that many natural advantages in the app economy vs. non-‐brands. When we asked consumers how often they downloaded branded apps, 43% stated either “not so often” or “not often”. Less then 6% seemed to download branded apps with a lot of enthusiasm. However, we don’t believe this is due to consumers’ unwillingness to engage with branded apps. More likely, it has to do with the fact that many brands haven’t properly understood how to engage with apps. The result in certain cases has been apps that don’t necessarily meet consumers’ expectations. Again, the research seems to bare this out:
What this may be telling us is that consumers aren’t going to cut brands any slack. Although 72% will download a branded app if it’s high quality, nearly 80% stated that the quality of a brand’s app can make it more trustworthy. Intuitively, this can also have the reverse effect. Consumers may pick a branded app over a non branded one but they will also expect the experience to be better and the quality of the app will reflect on what the consumer thinks of the brand on mobile. Asian consumers were even more vocal in this respect. Although a higher percentage of them had downloaded branded apps (29% vs. 19% of Americans and 16% of Europeans), 84% believed the quality of a branded app made the brand trustworthy.
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The good news for brands and agencies is that mobile advertising, particularly in applications, seems to be making inroads with consumers. To try and understand consumers’ perception of mobile ads we asked consumers two basic questions: Had they ever downloaded apps with ads in them and would they do so again. Overall, mobile ads seem to be on the right track. Nearly 73% of consumers surveyed had downloads apps with ads in them. In the US this was even more pronounced with nearly 84% of respondents giving a positive response. More importantly, almost 59% of respondents admitted that they would so again. In the US this number was as high as 70% indicating that consumers were both more familiar with mobile ads and more accepting of apps using this business model as a way to monetize their content. Interestingly, Americans were also more open to seeing their favorite apps have advertising in them or being outright sponsored by big brand with 73% of respondents saying they were fine with downloading a cool app that was sponsored by a third party. Naturally, seeing an ad is one thing but actually clicking on it or making some form of purchase is another matter entirely. Here again the news was encouraging. 25% of respondents admitted to having made some form of purchase after having clicked a mobile ad. In the US, where mobile advertising is perhaps more mature and a bit less novel, the number dropped to 21%. Asians and Europeans showed a slightly greater propensity to make a purchase after having clicked an ad with 26% of consumers in both markets claiming to have made some form of purchase through a mobile ad.
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Discovery and App Stores With over 600,000 apps now available and more then 100 different app stores available never has discovery been more a challenge for consumers. In fact, although app stores get the lion’s share of the credit for discovery, a whole industry has emerged around trying to enhance discovery for consumers. Again, our research seemed to bear out some of the different ways consumers discovered news apps.
The Internet actually turned out to be the leading way in which consumers discovered apps followed by App Stores as a distant second. Social media and friends accounted for the 3rd most common way to discover apps. Mobile advertising also clocked in 7% of responses although how effective this method of promoting apps is remains unproven in many cases. What we didn’t see from the research is whether consumers’ use of “online” included online variants of the various app stores out there. For example, it’s far easier to find apps on iTunes then directly on your iPhone. Likewise, Android Market, GetJar and Ovi Store all have online versions of their app stores to help facilitate discovery. One marked difference in the US was that consumers seemed to rely more on their friends or family for finding new apps with 20% of respondents saying that recommendations from friends had helped them discover new apps. This was in contrast to Europe and Asia whre typically recommendations accounted for less then 13% of the way people discovered apps.
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That consumers are using other tools aside from App Stores to find new apps shouldn’t necessarily be taken as a sign of total dissatisfaction with existing app stores however. Less then 10% responded they were either unhappy or very unhappy with existing stores they were using while 66% said they were either very content or content with their current app store. When asked what aspects of their current app store consumers didn’t like, they responded that there weren’t enough apps (25%), apps were too expensive (20%) or that it was too hard to find apps (19%). By and large what continues to matter most to existing app users when using app stores is:
• Ease of search (63% of respondents) • The number of free apps available (65% of respondents) • The overall number of apps available (63% of respondents)
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Conclusions App usage among existing consumers seems to being going from strength to strength and overall industry numbers point to more and more consumers joining the app bonanza every day. That said clear challenges remain. On the one hand, although consumers are downloading and using apps, they are limiting the number of apps they really engage with. Nearly 60% surveyed were using up to four apps per week. Yet the number using 10 or more apps was a low as 10%. This means that consumers will tend to lock onto apps that really serve a designed purpose (like Maps, Social Networking, a particular browser or a specific security app). Getting and staying on the consumer’s desktop is becoming ever more challenging. Second, the space is clearly becoming ultra competitive. Even for larger brands with established businesses. Gone are the days when you could simply develop an iPhone app, dump into the App Store and rack up users. Today even established brands need to build quality apps. More then that: they need to routinely maintain and update these apps to keep consumers interested. As if this wasn’t enough, brands need this positive experience to work across multiple platforms. Brands should keep in that reaching consumers on their phones is more then just cranking out a cute iPhone app. Consumers are literally using thousands of different phones. Android alone has over 160 different phones out their now and more then ½ dozen different operating system versions. Consumers will expect a positive experience independently of the device and will – without a doubt – blame the brand if it doesn’t deliver that experience they expect on their smartphone. Third discovery is and will continue to be a struggle. However, brands can ultimately capitalize on this given their marketing experience and resources. If consumers are venturing beyond App Stores for information then this is the perfect way for established brands to reach them. By leveraging social media, existing marketing budgets and mobile advertising they can make their case to consumers in multiple different ways as long as they deliver a robust experience. Finally, this survey also shows that we truly live in a global world even where apps are concerned. Consumers use apps differently, engage with brands differently, prefer different types of apps and even react differently to advertising. This makes development more challenging but also present opportunities for global brands that are able to localize their offers and tailor their app offering to the particular tastes of different local markets. In conclusion, the App Revolution is here to stay. Apps are not only changing the way we live and work but also fundamentally marking a paradigm shift in the way we engage with and consume content. Apps are now moving beyond smartphones to tablets, computers and even cars. The era of clicking and searching is slowly but surely having to make way for a new era Tapping and Swiping. This change will have profound implications not just for mobile content but for the way in which brands and their advertisers engage with consumers
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across digital media in general. It’s a brave new world and it’s time for the big folks out there to stop dipping their toes in the water. The water is nice and cool now. Why not simply dive in?
About the author Patrick Mork is Chief Marketing Officer at GetJar (www.getjar.com) where he leads marketing, PR, and developer marketing and serves on the company’s executive management team. Previously he spent 6 years in the mobile games business with glu mobile and I-‐play. Patrick also worked in strategy consulting at Diamondcluster and spent 5 years with PepsciCo in Latin America. An avid fan of history, politics and video games he has spoken at major industry events including SXSW, CTIA, Mobile World Congress, The Mobile Marketing Forum in New York and Los Angeles, Ad:Tech, OMMA Global and has appeared on both CNBC and Bloomberg TV as a leading expert on the app economy. Patrick holds an MBA from Insead and a Bachelor of Science for the Walsh School at Georgetown University. For more visit his blog here.
