Amadeus Consulting’s Director of Digital Marketing, Monica Valdez, was recently interviewed for a blog article called "Should you Have an App for That?" This blog, written by Kim Willoughby from the Center for Sales Strategy, is a great article for businesses trying to understand the business case for building an app.

I thought I would expand on this idea a little and take a different angle. Many articles have been written about how to develop an app, why you should develop an app, why you shouldn’t, what you should do with the app once it’s developed, and on and on the list goes. In fact, you can read all these ideas and more just on the Amadeus Consulting Mobile Technology Watch blog.

What about the value of an app? Not just revenue, though that is part of it, but the overall value an app will bring your business. Of course, all companies differ and what might make sense for one doesn’t make sense for another, but in general most companies should be at least paying attention to what is happening in the mobile space.

In-App Advertising

I did a little Internet research to find a good infographic about app value and found one by Mobclix, called Monthly Value of an App User, a real-time bidding mobile ad exchange. Although this is from last year, this infographic is great information for any company thinking about using mobile advertising as a way to earn revenue. It’s not terribly surprising that iPhone app users have a higher value, but I did find it interesting that utility app users have a higher value. Basically, in-app advertising is a good way to make revenue off your app without charging users up front for the app, but this really only works if your app has a large user base to generate enough ad impressions.

In-App Purchases

In-app purchases are a way to make money off your user base without charging them up front for the app. Generally, this is advantageous for newer apps that don’t have a large user base yet and don’t want to charge for the app right away. Some apps might charge for an enhanced user-experience, or use things like tokens that users can purchase to do more with the app.

In-app purchases have big revenue potential, according to IHS Screen Digest, a mobile media intelligence service. In 2011, in-app purchases accounted for 39 percent of the revenue for apps, and will likely be 64 percent (or about $5.6 billion) of total revenue by 2015. This is clearly a big opportunity for companies wanting to have a free app but still earn revenue.

The Value of Tablets and eReaders

This past holiday season saw a big jump in the number of people with a tablet or eReading device. According to Pew Research Centers Internet and American Life Project, the percentage of adults in the US owning a tablet device jumped from 10% in December to 19% in January. With the introduction of tablets at a lower price including the Kindle Fire and Nook, there is a wider audience in the tablet space.

This new trend represents another opportunity for companies to develop a mobile app optimized for the tablet, since close to half of tablet owners made or completed a purchase on their tablet. Tablets have a lot of potential for more engaging apps, and the more engaging an app is the more value your company will get from your users.

Creating a Mobile Strategy

As I said above, the value of an app isn’t just about revenue. Clearly there are a lot of areas where a business can make a profit in the app space, but companies have to be smart and have a strategy. Considering the number of apps out there in the world right now, a business can’t just expect to build an app and then instantly have a revenue stream. Mobile app promotion is a key part of building value from an app.

Some companies may just want to offer an app as part of their overall product offering. The app itself doesn’t have to be the money-maker. Amadeus Consulting’s CIO John Basso made some 2012 tech predictions, one of those being that mobile will no longer be a feature but an expectation. Especially as more of our technology is becoming integrated with mobile, consumers will soon expect that anything they buy is integrated with their smartphone. So any company not thinking about a mobile strategy right now is likely to get left in the dust.

Mobile app development companies like Amadeus Consulting offer consulting to our clients to help make sure they are taking advantage of mobile in the way that is best for their business model, so if you just aren’t sure what to do or how to get the value you want out of an app, feel free to contact us for help!