Publishers are well aware of the importance and continued growth of mobile usage. Yet, they are still struggling with the enormous challenges of a fragmented landscape and meager revenues. With limited resources and potential for monetization, publishers need to prioritize the projects that go into their mobile portfolio. The biggest decisions typically circle around the questions of “native app versus mobile web”, “Apple iOS versus Google Play/Android”, and “how to monetize”.
Are the advantages of native apps, such as richer and stickier experiences and hence more engaged and valuable users as well as the ability to capture new types of user data, worth the higher cost of development and maintenance for apps, which often struggle with discoverability and therefore typically smaller user numbers? Is the mobile web with lower cost but also less engaging experiences, with more advertising opportunities and larger user numbers the way to go?
Which of the main mobile operating systems promises more users, but probably more importantly, more revenues for its apps?
New US data on mobile usage as well as glimpses into how US magazine publishers approach mobile may help guide this process.
Mobile Apps dominate, but not for news
The recent U.S. Mobile App Report from Comscore reported that people spend much more time on mobile apps than on the mobile web, and that time spent on apps alone surpassed the time spent on websites in 2014. Growth of time spent on websites is essentially stagnant while mobile apps grew 52% and mobile web 17% from June 2013 to June 2014.
Taking a closer look at the main mobile platforms, time spent on mobile web is somewhat greater on tablets than on smartphones – but it still accounts for less than one fifth of the time people spend on their tablets:
However, a closer look at the reach on mobile app versus desktop/websites shows distinct differences by content or usage category. Categories that favor apps tend to be utilities (messengers, radio, weather, maps) rather than news and information (general news, sports, health and search):
Drilling down further into content, using news as a proxy, data on select news sites from Pew Research and Comscore show that the number of visitors to mobile news websites significantly outstrips those to the corresponding news apps.
Apple iOS dominates app revenues; Google Play/Android news app downloads
In a perfect world, publishers would develop for all the various mobile operating systems. The fact that iOS and Android dominate the landscape makes it relatively easy to limit the choice to these two – but which one of these should publishers with limited resources focus on?
Looking at revenues from apps, iOS is a clear leader: iOS completely dominated revenue from the top 10 grossing general and business news apps, with the majority coming from the iPad, reports App Annie, a provider of analytics and market data on the app store ecosystem. Even among all apps (outside of games), iOS claims more than four fifth of the revenues, with a larger percentage here coming from apps for iPhone than iPad.
Given the current importance of the iPad for mobile revenues, publishers should pay attention to the new Apple iPads to see if it leads to increased marketshare.
While iOS drives most of the revenue for news and other non-game apps, Google Play/Android leads in downloads of the top news apps and accounts for almost half of all non-game apps:
Since App Annie reports that 98% of Android/Google Play global revenue comes from in app purchases from free to download apps, it appears that currently, the way to capture revenue from Google Play/Android is to deploy a freemium model.
Magazine Media Approaches to Mobile
The above data indicate that there is no one right answer for publishers on mobile web or app, iOS or Android, but that the decisions depend on the objectives of the brand and the individual project. Ideally, native apps and mobile web should offer different consumer experiences, complement each other and play off the strengths of each.
In order to maximize mobile revenues, some of the large publishers are taking a two prong approach with mobile web and mobile app and are developing for both iOS and Android.
To monetize mobile web, publishers are trying new ways of advertising, often in conjunction with outside mobile advertising technology specialists. These efforts include native ads, sponsored skins, sponsored content, pre-roll and interstitial video ads.
To increase downloads of their apps and drive revenue, magazine media companies are increasingly employing a freemium model. This involves allowing access to general content but requires paying to get more in depth information or accessing special features. For example, Time Inc.’s People Celebwatch is a free app featuring celebrity news but offers a 99 cents per month in app purchase for a feature that allows a user to track the news and get alerts on their favorite celebrities. To drive discovery, People highlights this app on their free mobile website. Time’s Real Simple brand offers its No Time to Cook app with a limited number of receipes for free and full access to the recipe database for 99 cents/month or $7.99/year. Adweek reports that Hearst is in the early stages of developing its own freemium products.
Colin Bodell, Time Inc. EVP and Chief Technology Officer, was quoted in Adweek saying, “If you offer content that consumers can get elsewhere, [they won’t pay for it]. On the other hand, if it’s unique material that they want to engage with, then it becomes quite the contrary. You have to establish a value proposition.”
Mobile and monetization will be one of the hot topics that we will be covering at the upcoming DIS 2015 in Berlin which takes place from 23-24 March 2015. Hear first hand what media managers like Gary Ellis, Hearst Magazine International’s Chief Digital Officer, say about their strategies and approaches to mobile.