Online Retailers and the Mobile App Profit Dilemma

by Holly Shoemaker

A recent report from research2guidance reported that in 2012 most online stores made less than five percent of their revenue from a mobile app. 

Numbers at a Glance

The company surveyed more than 600 mobile-commerce companies and found the following:

• Almost 19 percent of e-commerce companies made more than 25 percent of revenue via mobile channels. 
• One third reported that they expected to generate more than a quarter of their revenue from mobile within the next five years. In addition, 15 percent of those companies reported that they planned to generate half their revenue from mobile apps.
• For online retailers to profit from mobile apps, they need to achieve downloaded numbers of more than two million. At this time, many online stores only achieve a few thousand downloads. 

Mobile Ad Spending to Grow

eMarketer predicts that U.S. mobile ad spending will reach $7.19 billion in 2013 and more than $20 billion in 2016. Despite those numbers, mobile only entails a small percentage of total ad spending. It comes in at just 2.4 percent. If the number increases as expected to $20 billion in 2016 that will bring the percentage to 11 percent – that means it will rank higher than radio, but will not overtake print.

Hope for Online Retailers?

The future for online retailers and revenue from mobile apps depends on the goods or services sold. Stores that sell virtual goods perform well. Companies that sell game apps and upgrades or virtual goods inside them also have a better chance at becoming part of the exclusive five percent.

Facebook Gains Mobile App Ground and Improves Developer Experience

by Holly Shoemaker

Facebook has started to generate revenue from mobile apps. Yesterday, Facebook announced that its mobile revenue grew faster than expected in Q2 2012. 

Facebook reported the following:  

• The company now generates 14 percent of its revenue from mobile ads. 

• Mobile usage rose 61 percent from year to year with a monthly average of 604 million users. The company also reported an average revenue per user rate of $1.29, up one percent from last quarter earnings, but still down 9 cents from Q4 2011.

• Revenue from payments increased 13 percent to $176 million.

• In total, advertising revenue increased 36 percent to $1.09 billion, up from 28 percent in Q2.

News for Developers

Facebook also announced an SDK update for Android last week, designed to make it easier for developers to distribute and promote apps. The company noted the release is the largest overhaul to date for SDK Android. Developers may download the release in the Android Dev Center.

Earlier in the month, Facebook announced that it has almost completed its redesigned Google Android app. It is supposedly in the testing phase, but the company has not released specifics or a date.

Concluding Thoughts

Facebook has made steps to improve mobile apps for its users and developers, and Google left an opening. While Google remains the number one provider of smartphone software, it missed targets because if its increased reliance on lower-priced ads. 

While all of these details bring some good news to Facebook, the company will have to maintain a balance with its mobile ad stream without damaging a user's experience with too many ads, and it will need to drive the price of its mobile ads up. At the same time, the company needs to retain its focus on improving the Android experience.

Mobile Apps Gaining Use During Emergencies and Natural Disasters

by Holly Shoemaker

A recent survey from the American Red Cross showed that twenty percent of people have used mobile apps to access information during emergencies and natural disasters.

Other Numbers at a Glance

The survey consisted of an online poll of 1,017 U.S. adults and phone interviews with an additional 1,018 respondents in June. The America Red Cross found the following:

• While more people still use television, radio and online sources to obtain updates regarding emergency situations, those sources of information have declined since last year. In comparison, the number of people who use mobile applications has increased 18 percent since 2011. 
• Mobile apps tied with those who turn to social media sites for information, and those who use social media are more likely to use apps for disaster or emergency information. Eight percent of the public downloaded apps to assist them in an emergency or disaster. The number significantly increases to 25 percent among users who learned about a disaster or emergency from social media sites.
• One in five Americans have used an app to obtain emergency information.

Concluding Thoughts

The use of mobile apps continues to increase across industries. When it comes to obtaining information for emergency and natural disaster purposes, an app may be just as quick as turning on the TV, especially if people are not close to one. However, work is still needed to communicate the usefulness of these apps. The study showed that respondents do not typically think about downloading an app via an app store during these times. Many apps like a weather forecaster or even an app flashlight are useful in daily situations and will come in handy should an emergency situation arise.

Patients Have Opportunities to Ensure Physicians Use Trusted Apps

by Holly Shoemaker

As I blogged last week, http://myuniversalapps.blogspot.com/2012/01/physicians-to-rely-more-on-mobile-apps.html, the number of physicians and other medical professionals using mobile medical applications is expected to increase this year. Another study, this time from The Archives of Internal Medicine, reports that more than 80 percent of doctors will use medical apps this year.

Quality of Medical Apps

While mobile apps will change the way doctors and patients communicate, concerns regarding the quality and accuracy of medical apps are a valid. In part, this is what drove the Food and Drug Administration (FDA) into proposing guidelines for certain classifications of apps. For many patients, it is likely your physician uses a medical app to look up drug interactions or for research purposes. These apps will not require regulation. Therefore, patients should understand what apps their doctors use and the reasons behind their use.

What Patients Should Know

Medical apps have a lot of potential. One of the biggest advantages to apps is their ability to be updated more quickly than a textbook. However, patients may not take the time to ask their doctors questions regarding apps.

If your physician uses a smartphone to access medical apps, make sure you find out the name of the app and how your doctor's office protects your privacy (when used to access patient information). You may also take your thought process a step further:

• Ask who developed the app.
• Ask who collaborated on the app.
• Ask what version of the app your physician uses.
• Ask why they like and/or trust the app.

Concluding Thoughts

Often times it is easier to find out who contributed to a medical journal or other print-based reference. When it comes to apps, you may need to ask the above questions. In a field that continues to grow, apps designed with subject matter experts (SMEs) will gain more users. Even if an app is not regulated, patients may play a large role in ensuring doctors use credible apps.

Five Ways to Ensure Medical Apps Are Accurate and Reliable

by Holly Shoemaker

When designing apps for the medical industry, accuracy and reliability rank as some of the most important factors for users. Physicians, nurses and other medical professionals will want to use medical mobile apps that have accurate and up-to-date information.

There are some steps that developers should follow to ensure that their medical apps meet the needed standards. Those include:

• Working with subject matter experts to ensure that apps provide accurate and timely information.
• Asking questions so developers know exactly how medical professionals will use the apps.
• Testing apps to ensure they work according to the needed standards.
• Making changes based on user-acceptance testing prior to releasing apps to the iPhone and/or Android markets.
• Scheduling release updates to keep apps relevant and incorporating any additional information that will help medical professionals diagnose, treat or communicate with patients. I wrote about the importance of using release updates to keep apps relevant in a previous blog. Readers may find that blog at: http://myuniversalapps.blogspot.com/2011/11/mobile-app-releases-help-apps-remain-in.html.

Concluding Thoughts

Just like patients hold their doctors and other medical professionals to high standards, those in the medical field will hold apps to the same ones. If I saw a doctor using a mobile app to assist in a diagnosis or treatment plan, I would ask questions regarding the validity of the app. Developers will need to keep the above tips in mind when developing mobile medical apps.