Friday, May 8, 2015

Which Metrics Matter For Today’s App Developers?

What sort of metrics should mobile app developers be paying attention to these days? That question kicked off a discussion about the changing nature of the mobile app ecosystem at TechCrunch Disrupt NY this afternoon between former IDC analyst and now App Annie’s new head of research, Danielle Levitas and Sequoia Capital’s Alfred Lin.
In the early days of the mobile app ecosystem, app developers were largely focused on a single metric: They wanted to get their app ranked highly on the App Store’s top charts.
But in more recent years, thanks in large part to the data aggregated by third-party app-intelligence platforms like App Annie and other mobile analytics providers, app developers have begun to dive deeper into their apps’ data to examine frequency of use, duration, loyalty and much more.
Levitas explained that, today, there’s not just one key metric that developers should track. Instead, she said, the type of data app developers should pay attention to will depend on the maturity of the company, among other factors. For example, for smaller developers, the store rankings are still critical, but it’s also important to compare what your downloads look like when compared to peers in your same category.
However, as a company matures, developers should focus more on those metrics that can help them monetize their business. She also noted that there seems to be a lot of emphasis on MAUs (monthly active users) as being indicative of an app’s success and traction. “But in a vacuum, that doesn’t mean that much,” Levitas noted.
What’s better is to find the metrics that matter to the kind of business you’re running and track those. For instance, commerce apps like Uber are often more about frequency of use rather than duration. Meanwhile, a game publisher may not be as interested in the number of visits, but rather the duration of users’ visits.
In addition, Levitas explained that even within a company, different departments will care more about some metrics than they do about others. Those charged with user acquisition may be trying to figure out if various cross-promotion strategies succeeded by looking at certain data, while the marketing departments may be more interested in whether or not a price change or an updated description led to more installs.
Lin, who today sits on the board of companies like Airbnb and Houzz, agreed, noting that, as an investor, companies would come in and pitch his team while referring to a set pack of metrics that they think are important to their business.
For one of his team’s investments – an anonymous social app called Whisper – they focus on engagement. The startup found that 50 percent of its users accessed the app five out of the past seven days, which is a really high level of engagement. But by looking at monthly active users alone, you wouldn’t have this kind of insight about the app’s “stickiness.”
 
 
This is why tracking just MAUs is not enough, said Levitas. Developers also need to understand the different types of users they have, not just how many, she added. This can help them prioritize where and how to expand – perhaps by targeting a specific demographic, geography, or by learning more about what other sorts of apps their users enjoy and are active in.
Levitas, who joined App Annie in April as the company’s SVP of research and analysis, previously spent nearly two decades at IDC, where she was most recently group vice president and GM of IDC’s Mobility, Digital Media & Consumer research team. At App Annie, Levitas now leads a team that’s workng to provide deeper insights and analysis of trends from the company’s wealth of data on the mobile app ecosystem.
Incidentally, App Annie’s dataset just grew by quite a bit – App Annie announced earlier today that it acquired mobile data measurement service Mobidia, which will allow it to accelerate its international expansions, including into China.
This sort of international focus is critical to App Annie’s growth as a company, just as it is now to many of App Annie’s customers.
As the mobile app ecosystem matures, app developers are looking beyond their home market to expand their own business and increase their revenues.
This is another area where looking at the right data can help. Today, some app developers make the mistake of simply expanding their U.S.-based app first to other English-speaking markets, like the U.K., Canada and Australia, when they’re ready to begin their global push. But prioritizing these markets isn’t always the best choice.
To illustrate this point, she offered an example where one of App Annie’s customers found that, in the U.K., their top competitor had three times their share. That led the company to reconsider their move into that market, because being No. 2 there would mean a very small slice of the pie. Instead, the company prioritized a different country where they had more opportunity to grow.

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