Freemium : $$$ v/s Time

Last week Flurry released an interesting chart on the Freemium games .


As evident, the data suggests that max amount of money (49%) is spent by users in the 25-34 age group. They play only for 29% of the relative time. One possible reason is that this demographic prefers to buy upgrades and special powers to help them cross levels faster. In the same light, the 18-24 years age group spends the max amount of time (32%) but only 16% of the relative revenue comes from them. This is even lower than than the 28% revenue coming from the 35-54 year age group which spends only 14% of the relative time.

While 13-24 year olds constitute more than 50% of the time spent, they contribute only 21% to the revenue. This is an interesting observations for gaming companies. It helps them understand that they can make more money by catering to the in-app purchases of this higher age group (24-54 years).

Flurry had earlier published that consumers spend an average of $14 per transaction when making in-app purchases in freemium games. What items does this money go to? Another interesting chart shows the spending on durable v/s consumable good.


Durable goods are those which can be use to provide permanent benefit in the game play and consumable provide only one time benefit. Personalized are those which are only for a purely decorative purpose. Consumable goods constitute more than 50% of all in-app purchased in freemium games. A majority of this is a towards game currency which can be used in multiple ways within the game.

The data cannot be generalized completely and should be taken with a pinch of salt. Depending on the actual game needs the attractiveness of the durable and goods will change.

The two sets of analysis above are important when trying to decide what in-app purchases to offer and what age groups to cater to. With 65% of all revenue generated among the top 100 games now coming from freemium games these numbers become even more important to understand.

HTML5 v/s Native Apps

With more and more companies putting in thousands and thousands of $$$ on their mobile initiatives, the big question about the mobile road map is : HTML5 or Native Mobile apps?

In one of my earlier posts, I discussed some factors which will help a company decide whether to opt for a Mobile website or a Native app. The current question becomes more interesting because of the present state and buzz about HTML5.

What is HTML5?

HTML5 is the fifth version of the HTML language that provides the basic building blocks of web pages. It will support multimedia without plugins and has the ability to work on all computers and devices.



Advantages of HTML5

• Portability: HTML5 web apps can be accessed and used on any device via a web browser, much like a mobile website
• Cost effective: They can turn out to be significantly cheaper that developing native apps for various devices
• Offline access: Web apps also provide the capability for offline access and usage via application cache, meaning you don’t have to have a network connection to use them.
• HTML5 introduces new APIs to access mobile device functionality, in particular sensors such as accelerometer and GPS
  

Few HTML5 Limitations

• Security issues: Users could tamper with processing scripts, which might allow unauthorized access. Hackers can get access to perks, discounts, etc. for which they really aren’t eligible.
• Synchronization challenges: While the app is connected, it can save data to the cloud however if it goes offline, changes will not get saved. Synchronization can become a challenge when people access from different devices.
• User Experience: Mobile apps are a lot about the user experience. Its really crucial how well you can engage your user with such a small screen. Native apps till date offer a better user experience, ease of use and convenience.
• Standard Gestures: Some standard actions specific to a device will not be supported by HTML5. For eg: iPhone has the standard 'long hold' which is used for many actions. The HTML5 look and feel will be like the web feel.
  
• Marketing effort: This is specially crucial for smaller companies who attract many of their users from the various app stores.
• Monetization: The fact that apps like Angry Birds have made millions of $ is possible only because of an app store which lets people discover them and developer monetize them. This is not so easy on HTML5.

HTML5 believers say it could destroy the native app by 2014. However, there is a lot of work to be done on the HTML5 front to remove the 'clunky' behavior of the technology.

Some quick tips to help you decide:

• If your app is very complex and highly interactive, use native
• If you are targeting multiple platforms and your offering/ value is web-centric, use HTML5
• A native app can also have web view, so consider a 'hybrid app', if required
• Consider one or both options based on the company and user requirements and your budget and target.
  

Only time will say which will rule after the next few years. For now, the native app market is here to stay and flourish.

The 4 Pillars of Mobile Apps

With about 14 bn app downloads from the iPhone app store alone, one thing is obvious - the market for Mobile Apps is here to stay. Gartner estimates the total mobile app downloads since 2008 to reach 185 bn in 2014. It is becoming increasing important for marketeers and product managers to understand the basic things that make a mobile app successful.

Here are the 4 pillars which are crucial to create a successful mobile strategy for any company. I am not explaining any of these in detail since that will take several long posts. The objective of this post is to give you some Food For Thought - what to think about when you decide on your mobile app strategy??

1) User Experience and Design

The small screen real-estate makes this one of the most important thing for a mobile device.
This starts from a high level overview - understanding the main features for your target user, using metaphors for design and creating the main app flow and the side flows - to getting into very specific details like managing user data entry well - should it be a keyboard or keypad or scroll wheel/ picker? When will the app sue swipe v/s flick v/s pinch? What alerts, action sheets, tool bars will be used? Apple HCI Guidelines explain some of these very well. Here are some more details.

2) Application Performance

This is the software that runs the app. Most crashes of app happen due to mismanaged memory. It is important to ensure the iPhone memory is managed properly. What features work when the app is offline? What information needs to be cached - when the app is pulled from the background v/s when a new instance is charged? How important is data security? Do the API calls need to be asynchronous? There are many more such questions which need to be answered to help create a great performing app.


3) Monetization

The decision to make the app free or paid is a difficult one, yet very important to an app's acceptance in the market. With the new trends of Freemium apps, this becomes even more confusing.

Options - Free always!! (with or without ads) OR Freemium with in-app purchase for subscription or lite version OR Freemium with in-app purchase for virtual goods OR Paid

Some things to consider - how do you compare to competition? (If you are far better then you can charge a premium provided you have some marketing budget to get the word out there and to make the app viral). Is the app more for a branding experience and hence needs to be free? Is your user base big enough to make adding ads sensible? (tip: If its not, don't spoil the user experience for a few dollars everyday)

4) Analytics


Last but not the least, this is the feedback loop to track your app success. What are your engagement and retention metrics looking like? How many new users are you adding? How many sessions and what is the session length? How many repeat users do you have? What demographics does your app cater to? How do these metrics compare against those for competition? With companies like Flurry, this process has become less complex than what it seems. Read more on the need for analytics here.

Feel free to post any questions you have on this.

Deciding on the Revenue Model for your Mobile App

When deciding between a ‘free’ ad-supported business model and a 'paid' app business model consider these things:

1) Compare the revenue for both the models by doing the following anaylysis

• Crunch the number to estimate the revenue you think you can get per user on a free vs. paid model - estimate the number of impressions you’ll get per day (or week) per user for your ad model v/s how much you plan to sell your app for
  
• Consider the number of users you think you can realistically get with each.
• Ensure you estimate the reasonable growth rate. It will be a while before you can get a million users

2) If you’re leaning towards a free, ad-supported model, make sure it’s scalable for you to support marketing and business development

3) If you want to have a free, ad-supported model but the numbers in 2 above make it unaffordable, consider whether a 'freemium' model would work for you

4) If you feel your app is far better than other apps out there, don't be afraid to charge for it. However, be prepared to invest in marketing and add some major viral elements.

Basic things to remember when Designing or Developing for iPad

*Source: Morgan Stanley

Tablets penetration in the market is still small, however it is seeing a strong growth. The trends for the tablets market cannot be ignored and need to be kept in mind when designing or developing for them.

While many people thought this will replace the mobile devices, that is not necessarily true.

1. Trading Home Computer Time for iPad Time
- Its replacing the web surfing on your Laptop. According to a Neilsen survey 70% of tablet owners and 68% of smartphone owners said they use their devices while watching television.

2. Tablet is a Shared Device
- Family members share an iPad at home and hence usually use one login for various apps or accounts. This misrepresents user analytics and user cases.

3. Sharing of Tablets raises security concerns
- When you leave your iPad on your Coffee Table and have guestes over, who browse your iPad, this becomes super critical.

4. Expect exception App And Website Experience
- When browsing the Web, users expect to access the full version of websites, so ensure that your site is optimized to deliver a great experience on the iPad. At the same time, the apps need to leverage the bigger screen and specially the split screen view of the screen (over an iPhone)

Explaining the UX Value

UX means more than just the product interface; it encompasses the whole experience a person will have with a brand and their overall satisfaction with a product. A solid UX design process begins with with discovery and ends with development integration, relying heavily on stories and prototypes in between.

It is the role of the UX designer to demonstrate the value that UX work brings to a product. Here are a few steps which the UX designer can follow to help communicate the value more effectively to all the stakeholders in a company and hence improve the user experience for the customer:

1) Identify Key Business Objectives
To communicate the value proposition, you need to understand the project strategy. You should also get these validated with your other stakeholders like - team members, customers and end users. Understand the objectives and document them for future use.

Examples for an e-commerce mobile app:
1. Move users from website towards mobile app
2. Increase conversion rates from start to checkout
3. Increase overall customer satisfaction with product discoveries

2) Identify the UX attributes

List down the UX attributes which will influence the success of the key objectives. Its important to remember that not every key objective is influenced by UX design. Also remember not to overlook how UX may subtly impact the objectives.

The UX attributes that should be considered in a project include:
Usability: Who is the target audience and what is their expectation of usability? (Eg: Is it for preschool kids, high school kids or architects?)
Accessibility: On which devices with the app be used by the target audience?
Performance: How well does the application need to perform? How fast does it need to load and respond to input? Should this require additional sreens/ buttons / user input points?

Simple descriptions of how these attributes influence the key objectives are sufficient. Building on our earlier example:

1. Migrate users from website towards mobile app
a. Usability equivalent or better than website (Eg: Amazon mobile app has a better user experience that the Amazon mobile website)
b. Usability of app different mobile devices
c. Performance of app must feel quick and responsive to user input
2. Increase conversion rates from splash page to checkout
a. Find products quickly and easily
b. Trade off between number of clicks to purchase v/s amount of information on each screen
c. Simple and easy to use checkout pages (Eg. Entering or storing CC information)



3) Identify the current success of these UX attributes
For each of the UX attributes you've defined, assign a rating or assessment to the current state of each. Rate them from Poor to Excellent (on a scale from o to 10)

4) Identify the high priority items

UX can get tricky when trying to achieve multiple objectives. Hence identify the high priority items to ensure those features are not compromised

5) Identify the desired state of these UX attributes

Determine to what level each of the identified attributes needs to be improved. Some items need to be imrpovized slightly while some others may need to be excellent to fit the business objectives.

6) Identify the activities and design work that can be done to improve the state of the UX

A plan can be made for how to improve those higher priority attributes from the current state to the desired state.

When the value proposition of UX is directly associated with key business objectives, it is much easier to have quality discussions about time and budget for UX activities. Helping your stakeholders understand how UX directly and indirectly influences their key business objectives allows you to focus more time on critical work and might help you increase the budgets and time you are allocated for UX initiatives.

Comparing Mobile Analytics Solutions

In my previous post I explained the important of using Mobile Analytics in mobile apps. This post compares some of the popular solutions available in this category along with my suggestion for.

Google Analytics
Google Analytics enables you to track performance by downloading the SDK and use it to get traffic insight on iPhone, iPod Touch and Android application platforms.

Google Analytics SDK allows you to rule which view or what part of your application view will trigger a page view. Google suggests that you trigger at least one pageview, and do it at the point the app loads, if you want Google Analytics to track Unique Visitors.

Admob
Admob has made a simple to implement mobile analytics solution. You can track visitors, site usage, traffic source and mobile goals that you create in AdMob administration section. You can track the effectiveness of advertising campaigns from advertising partners that you work with, get detailed information regarding the referring sites and keywords which your visitor came from, analyze Pageview, bounce rate, downloads, etc.
Further, Admob ads can be integrated.

Flurry
Flurry provides real-time app usage statistics for developers who need a single mobile app analytics platform, that will allow them to get app usage insight, how the app performs on different handsets and allows them to watch advanced reports to increase retention and grow their user base for the app shelf-life

If you have a multi-platform mobile app, you can use Flurry on many types of devices, whether you deploy your app for Apple iPhone, Android device, Blackberry or JavaME and others coming soon. The offering is free.

AppCircle can be integrated for ads.

Webtrends mobile Analytcis
This is a robust and flexible product, which allows mobile website owners and apps developers to get in-depth data analytics of their app/website usage. It gives you the advantage to monitor, track and analyze real-time usage data and measure every metric that can possibly be measured for both apps and mobile websites.

There are also some other companies like Bango which provide advanced analytics however they are not free to use.

If you are on considering analytics for Mobile apps, I highly recommend Flurry. It is very user friendly and provides a sea of analytics which are more than what you need to made those crucial decisions. Besides this, it is absolutely Free!

The other main benefits of Flurry are:

• Mobile app usage insight
• Analyze app performance on different handsets
• Who uses the application?
• What are the most useful feature in your app?
• Check users’ loyalty
• Users by country , time and customer segment
  
• Average session usage session length