The Future Of The App Economy In Australia

The Future Of The App Economy In Australia
SHARE
THIS



In this opinion piece, account director ANZ at M&C Saatchi Mobile, Bobbie Gersbach-Smith looks at where Australia’s app economy is headed as a mature market, in light of most global growth predicted in emerging markets.

With the meteoric rise of the mobile-first world, the app ecosystem has emerged as the primary interface in which we spend a huge portion of our time, and increasingly our money. According to Nielsen, 85 per cent of our smartphone usage is in-app, equating to around an hour/day in Australia. We’ve witnessed a fundamental shift in media consumption, considering the channel was non-existent less than a decade ago.

Products, brands, developers, media, agencies and of course the app stores have commercialised the app ecosystem in an enormous way over this time, with global mobile app store revenue reaching $51 billion in 2016. The app ecosystem is predicted to surge on, with app store revenue forecast to double by 2020 given a sharp 138 per cent increase of installed smartphones in the same period (App Annie).

Of course, the vast majority of these 3.6 billion additional smartphone users will come from emerging markets across Asia and South America, where smartphone costs are falling to feature phone levels.

We therefore have to wonder where this leaves mature markets such as Australia, and how mobile stakeholders will sustain the growth seen in recent years.

Let’s take a look at some likely implications of the changing app market locally:

A greater focus on App Search Marketing (ASM)

The mobile industry to date has enjoyed the proliferation of the ‘app install’ channel, with apps able to buy high volumes of installs very efficiently. Whilst, in many cases, this remains an effective tactic today in influencing user acquisition and for chart boosting, it’s likely that these paid installs will become gradually more expensive, with the plateau of install volumes in mature markets.

Chart position, however, remains critical with 65 per cent of us only using 1 app in a single category (Global Web Index 2015), and apps will need to begin building upon their traditional ‘app install’ buys to maintain visibility.

It follows that we’re likely to see a greater focus on both paid and organic ranking efforts within the app stores. How?

  • App Search Optimisation (ASO) has evolved to organically improve apps’ visibility in the App Stores, via unofficial levers which play to Apple and Google’s store algorithms.
  • Concerning the Android operating system, Google attracted a lot of attention in 2015 for launching their paid Google Play search product to improve apps’ positioning against relevant keyword queries (outside of the top charts).

The battle for gross revenue share between category leaders

Referring again to the emerging reality of consumers only using  1 app per category, it’s clear that the well-established apps appearing above the fold in charts and search results are going to have a very distinct advantage in future.

With overall app usage still increasing despite the app install plateau, there’s an opportunity for these established apps to move out of user acquisition, into the in-app revenue growth phase.

Increasingly, we’re seeing non-gaming categories feature in the top grossing charts via in-app purchase (outside of Candy Crush ‘extra lives’). The main examples of this currently are via subscription (e.g. audio streaming apps) and additional product access (e.g. dating apps offering additional interaction).

Prepare to see more dominant apps experimenting with new in-app purchase models.

The growth of app re-engagement

Although acquisition remains pivotal to most apps, for many there is an increasing focus on how best to monetise existing active users. One of the leading attribution providers in the Australian market, Tune, has noted that just 13 per cent of users remain active beyond a week of installing an app.

Re-engagement technology  is hence set to increase in demand.

However, app re-engagement is not only being used to retarget lapsed or dormant users. Upselling high value spenders, pushing promotional or seasonal campaigns, and cross-promotion are also emergent strategies.

Mobile market leaders including Facebook and Google have released new ad products in 2015 to improve their re-engagement process, facilitating deep linking and post install measurement in social and search (e.g. Google’s App Streaming and App Indexing).

In a recent case study published by app re-engagement specialist Remerge, and attribution provider Apps Flyer, re-engaged users drove a 62 per cent lower cost per lead than acquired users. Of course, possible re-engagement scale will vary, however the growth indicators are promising. Ad Roll’s 2016 State of the Industry suggests that 87 per cent of marketers plan to increase mobile re-engagement investment in 2016, with 82 per cent of marketers already leveraging the channel.

Cross-screen potential

The mobile app economy has traditionally been fuelled by direct response advertising, with the Australian market focusing heavily on acquisition efficiency  and attribution technology integration in recent years.

With the leading operating systems gaining scale across multiple devices (i.e. smart watches, connected TVs, tablet computers) a greater potential for brand advertising presents itself. The ability to reach a single user across all of these devices has been a well-trodden industry mission – and one that the app ecosystem can accomplish.

Hence, despite the success subscription services such as Netflix have seen in the past 12 months, it’s highly possible that apps existing across multiple channels will branch out to experiment with ad funded models.

In a nutshell, mature mobile markets face a changing app economy, however there’s every indication that there remains considerable potential for further growth. Both usage and technology are on our side domestically, as the app ecosystem plays a crucial role in further connecting us globally on the road to 2020.

Latest News

oOh!media Acquires Here, There & Everywhere-Owned Adshel For $570M
  • Media

oOh!media Acquires Here, There & Everywhere-Owned Adshel For $570M

oOh!media has acquired Here, There & Everywhere-owned Adshel for $570 million. The move follows a bidding war between oOh!media and APN Outdoor for the outdoor street furniture business. In April, Here, There & Everywhere (HT&E) received a revised offer of $470 million from oOh!media for Adshel, however, HT&E claimed it wasn’t the “most attractive” one […]

Daylight Agency Appoints Shelley Hammond As Director Of Agency Operations
  • Media

Daylight Agency Appoints Shelley Hammond As Director Of Agency Operations

The Daylight Agency’s significant growth has continued with the appointment of Shelley Hammond as Director of Agency Operations. Shelley is a leader in the global communications industry and brings vast experience following senior roles in major corporates as well as the agency environment. Shelley will be responsible for the commercial running of Daylight including client retention and […]

Host/Havas Takes Out Cannes Grand Prix With Palau Pledge
  • Advertising

Host/Havas Takes Out Cannes Grand Prix With Palau Pledge

Host/Havas has secured Australia’s first grand prix award at Cannes overnight, taking out the top gong for the direct lions with its work Palau Pledge. The work, which sees all visitors to the tiny island nation have their passport stamped with a pledge to be a good environmental citizen, which they must sign before entering […]

by B&T Magazine

B&T Magazine
Instagram Launches Long-Form Video
  • Technology

Instagram Launches Long-Form Video

Instagram unveils new eye-catching feature. Slicing onions while reading this will also make it eye-watering.

Ridley Scott Unveils New Directors Showcase At Cannes
  • Media

Ridley Scott Unveils New Directors Showcase At Cannes

Curated this year by Ridley Scott, famed director of Alien, The Martian and other classics, The New Directors Showcase at Cannes is now in its 28th year. Acting as a platform for talented new directors to have their work premiered to a global audience, Scott took to the stage in front of a full house […]

by B&T Magazine

B&T Magazine
ANZ, PHD & JCDecaux Harness The Power Of Data
  • Advertising
  • Campaigns

ANZ, PHD & JCDecaux Harness The Power Of Data

ANZ and media agency PHD have partnered with JCDecaux to launch a unique campaign that harnesses the power of data across three cities incorporating actual tram, train and bus timetable information to align with the new ANZ App.

Report: Consumers Are Hitting Play On Mobile Video
  • Technology

Report: Consumers Are Hitting Play On Mobile Video

Ooyala survey finds media companies created and processed nearly three times as much video content in Q1 as Media Companies Created & Processed Nearly Three Times As Much Video Content in Q1 2018 vs. Q1 2017.

MercerBell Calls In Two New Data Hires
  • Marketing
  • Technology

MercerBell Calls In Two New Data Hires

Proving many photos shot on an iPhone so often come out washed-out and grainy comes this article's accompanying pic.

Intrepid Travel Go Back 30 Years, Posting Classified Adverts In Newspapers
  • Campaigns

Intrepid Travel Go Back 30 Years, Posting Classified Adverts In Newspapers

Intrepid Travel has gone back in time and is placing classified adverts for a new ‘mystery expedition’ to places that yet mapped by Google.  The adverts to be placed in Courier Mail, Herald Sun and Sunday Telegraph are calling for intrepid people to join a journey with “long travel days, intermittent electricity, no Wi-Fi, cold […]

Watching tv and using remote control
  • Advertising
  • Media

GroupM Investment Forecast For Australia: TV On The Rise As Digital Slips

GroupM has updated its 2018 ad investment forecasts and released its initial 2019 outlook. GroupM predicts $24B in net new advertising investment this year, the best annual increment since the bounce back from the global recession in 2010 when $26B was added to investment. GroupM estimates total advertising investment will grow by 4.5 per cent this year […]

Indigenous Campaign Deemed Too Controversial By APN Media To Run
  • Advertising
  • Campaigns

Indigenous Campaign Deemed Too Controversial By APN Media To Run

Aboriginal Victoria’s campaign in support of Australia’s first-ever treaty legislation, Deadly Questions, has been deemed too controversial to run by one of Australia’s leading outdoor media providers, APN Media. Online platform Deadly Questions provides a safe space for people to ask questions and have them answered by Aboriginal Victorians, to learn more about their cultures, […]

Introducing: YouTube Music Australia
  • Technology

Introducing: YouTube Music Australia

The wait is over! Starting today, YouTube Music is available to everyone in Australia, New Zealand, the U.S, Mexico and South Korea in addition to 12 new countries including Austria, Canada, Finland, France, Germany, Ireland, Italy, Norway, Russia, Spain, Sweden, and the United Kingdom. Now fans around the world can find more of the music […]

Will PR Finally Earn Its Stripes At Cannes This Year?
  • Opinion

Will PR Finally Earn Its Stripes At Cannes This Year?

In this guest post, Haystac’s national general manager, Jason Carnew (pictured below), says with all this talk of Cannes at this time of year, it’s a kindly reminder that the PR business needs to get its act together in terms of awards, work and judging… All eyes on are Cannes as some of the best […]

Opinion

by B&T Magazine

B&T Magazine
Ex-DDBer Unveils Designer Headscarves For Cancer Survivors
  • Campaigns

Ex-DDBer Unveils Designer Headscarves For Cancer Survivors

Two-times cancer survivor, Frankie Good Stuff Award Winner, ex-DDBer and founder of Bravery Co. Emily Somers has collaborated with a range of top-notch illustrators to produce Australia’s first range of designer headscarves for young cancer warriors. She is now crowdfunding $40,000 to produce the scarves and donate one to all the young women in their 20’s […]

New Advertising Platform Launches Down Under
  • Advertising

New Advertising Platform Launches Down Under

Following its massive success in Europe, Asia and the UAE, the Polishoe concept, which brings a high-demand shoe polish service and HD digital advertising platform together, has landed in Australia.

Women In Media Profile: Aimee Buchanan
  • Media

Women In Media Profile: Aimee Buchanan

No Women in Media series would be complete without the irrepressible Aimee Buchanan. Read all her pressibles here.

by B&T Magazine

B&T Magazine
Set for blue sky, different clouds icons, cloud shapes, labels, symbols, icons. Flat graphic vector elements
  • Technology

PubMatic Unveils Cloud for Publishers And Tech Companies

PubMatic has launched PubMatic Cloud for publishers and tech companies looking to implement and control their own programmatic technology. By accessing PubMatic’s technology, global infrastructure and demand connections on a platform-as-a-service (PaaS) basis, clients are able to achieve full transparency and achieve greater control over their programmatic monetization. As programmatic trading becomes mainstream, innovations such as […]

Women In Media Profile: Claudine Hall
  • Media

Women In Media Profile: Claudine Hall

The Women in Media Awards are back for 2018! To celebrate this wonderful fact, and to recognise some of the killer women in our industry, we’ve created a women in media series – and have profiled some pretty inspiring women so far. This week, we chat with Bauer Media head of trade marketing Claudine Hall. […]

by B&T Magazine

B&T Magazine
Cancer Council and Target Tradies Tackle On-The-Job Skin Cancer Risks
  • Campaigns

Cancer Council and Target Tradies Tackle On-The-Job Skin Cancer Risks

Workers on construction sites receive five to 10 times more UV exposure every year compared to indoor workers. Target Tradies and Cancer Council have announced the launch of a partnership to help educate Australian construction workers about the importance of being SunSmart at work. With evidence showing that outdoor workers receive five to 10 times […]