Developer State: Challenges facing app developers

1
Developer State
A snapshot of the challenges app
developers face in today’s
market

ironSource November 2016
The app developer
community is growing

The app developer
There’s over 2.2 million apps in the Google Play
store and another 2 million in the App store.

The app developer
This means more competition for users, and
keeping those users engaged and happy while
monetizing is no easy feat.

We asked developers from around the globe
about their biggest pain points, and learned
more about which obstacles app developers
are confronting in today’s mobile market.

Who did we speak to?

Nearly half of the developers we spoke to are from
small studios (1-10 people).

500 +
18.9%
101 - 500
8.9%
51 - 100
13.3%
11 - 50
11.1%
1 - 10
47.8%
How many people are in your company?

More than half of developers are based in Asia,
while 22% were European-based, and 12.2% were
from North America.

Where is your company located?
Africa
2.2%
South America
4.4%
North America
12.2%
Europe
22.2%
Asia
55.6%

63% of teams make non-game apps and 37%
create game apps.

8%
developing for iOS
36%
developing for both
The majority of teams surveyed were developing for
Android with:

What are the biggest
challenges facing developers
today?

Re-engaging
users
13.2%
Connecting with
relevant users
25%
Monetizing
effectively
19.1%
Understanding
data
16.2%
A/B testing
1.5%
Organic App
Discovery
19.2%
Other
5.9%

No matter the size of the team, our data shows
the biggest challenge for app developers is
connecting to users and getting their app found.

Surprisingly, A/B testing was considered a
challenge by less than 2% of teams we spoke to.

The biggest challenges:
app development

User
segmentation
28.1%
Churn analysis
6.3%
LTV Calculation
31.3%
Funnel Analysis
18.8%
App Store
optimisation
9.4%
App store data
6.3%

When it comes to development, using data to
segment user behaviour was a key concern,
with LTV calculation as the clear pain point.

Only 9% of developers we spoke to dedicate
time to optimizing for app stores.

That is a big opportunity to miss out on.
12% of daily active users search for apps
everyday, 50% search every week.
App developers looking to grow their user base
should be dedicating time and resources to
optimising for app stores.

The biggest challenges: app
monetization

Three issues dominate in the
monetization conversation:

Three issues dominate in the
monetization conversation:
● Balancing subscription models
● Setting IAP prices
● In-app ads damaging user experience

Balancing
freemium, pay,
or subscription
models
32.3%
Setting the right
IAP prices
32.3%
In-app ads
damaging user
experience
22.6%
I don’t have any pain
points, my monetization
is working fine
6.5%
Other
6.5%

Setting the right IAP prices and choosing the right
subscription model are major issues for app
developers.
And quite rightly, there’s everything to play for.

In-app advertising is going to generate the
majority of revenue for apps going forward
(according to App Annie), with annual revenue
reaching $120 billion in 2020, up from 2017’s
$50 billion.

IAPs still matter, but for smaller apps who may
benefit from ads, finding the balance between
monetization models should be a major focus.

The biggest challenges:
Acquisition Strategy

Perfecting the
soft launch
12.1%
Finding the right
UA channels
21.2%
Low quality users
18.2%
Targeting not
sufficiently strong
enough
9.0%
Other
9.1%
I don’t have a paid
UA strategy
15.2%
Cost of UA doesn’t
justify LTV
15.2%

The biggest challenge developers face in
acquisition is:

Choosing the right user
acquisition channel

Developers can choose to buy users on many
different channels - through other apps like
Facebook, or Google, or through an ad network.
The challenge is choosing the channel to fit your
user base and KPIs. For example, Facebook has
brilliant scale.

Some channels might be great for gaming
apps, whereas another would be best for a
social app’s UA.
Ad networks that combine the different
capabilities are a useful tool for developers.

How do geography, app type
and company size impact the
data?

The challenges in development
across different regions

◼ Building the data flow ◼ Beta testing ◼ Integrating SDKs
◼ QA ◼ Developing For ◼ Other
Multiple Platforms

Asia grapples most with developing for multiple
platforms, whilst North America and Europe are
more concerned with QA.

Beta Testing isn’t seen as an issue for developers
in Europe or North America, although is a challenge
for 6% of Asian developers.

The challenges in development
across different app types

Game apps have greater concerns around
integrating multiple SDKs. This is probably because
seamless gameplay and app performance is a key
issue for them.
Developers concerned with managing multiple
advertising SDKs to maximise their revenue can
use an ad mediation platform to overcome this
challenge.

More SDKs are deployed in gaming apps than
non-gaming due to the number of users playing
the game each day, and the ad inventory needing
to be filled.

For game developers, finding the right SDK
provider specialising in ads for games and then
integrating this according to their monetization
strategy will be a worthwhile investment.

Challenges in monetization
strategy across different regions

◼ Balancing freemium, ◼ In-app ads damaging ◼ Other
pay, or subscription models user experience
◼ Setting the right IAP prices ◼ I don’t have any pain points,
my monetization is working fine

Developers in Asia are less worried about setting
the right IAP prices compared to European
developers.
As disposable income grows in Asia, this issue is
likely to become more prevalent for Asian
developers.

For Asian developers, worrying about how ads
damage the user experience was more of a
concern than for European developers.
This might be due to the wider adoption of more
rewarded ads that give users a positive, valuable
experience in return for watching an ad, by
European developers.

Challenges in monetization
strategy across different app
types

Balancing payment models is a standout issue for
gaming apps.

Balancing payment models is a standout issue for
gaming apps.
Non-game apps are concerned with in-app ads
damaging user experience and balancing
monetization models .

A higher proportion of non-gaming apps said that
their monetization strategy is working fine:

More non-gaming apps feel that their monetization
strategy is working fine:
15.4% 7.1%
of non-gaming compared to of gaming
Apps apps

Challenges in acquisition across
different company sizes

◼ I don’t have a paid ◼ Finding the right ◼ Low quality users ◼ Other
UA strategy UA channels
◼ Perfecting the ◼ Cost of UA doesn’t ◼ Targeting not strong
soft launch justify LTV enough

Studios with 11-50 employees show a much
greater concern with the need to perfect a soft
launch.

While bigger companies with 101 to 500+
employees are focused on issues with low quality
users.

This is likely due to the fact that as UA budget
increases with the size of the company, so too do
concerns about the quality of UA campaigns.

Want to learn more about
how to turn your app into
a successful business?

Join 20K other happy developers
and contact us here to learn more
about how we can help you
maximize your app marketing and
monetization.

About ironSource
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