In the early days of mobile development calculating ROI was challenging because the technology was new and the marketplace was still developing.  With the introduction of iAds from Apple and other ad marketers you now have some sense on what a “tap” or view inside mobile app is worth, or at lease what others are paying.  The WSJ recently posted this article:  Apple's Ad Service Off to Bumpy Start.  Detailed inside the article is a very interesting item:  At the high end of most mobile ads branded advertisers are charged $2 per tap on a banner.  Additionally Developers who wish to promote their apps are being charged as low as $0.25 per tap.

With these numbers you can begin to develop Return on Investment (ROI) for your mobile App Project.  Let’s say you spend $5000 to develop, build, and distribute your custom app for your business.  If a “tap” inside is worth $2 it would require 2500 taps to recoup the project costs.  If your app is accessed “sessions” 200 times per day with 10% click rate that equals 20 clicks per day.  2500 clicks divided by 20 clicks per day equals 125 days to recoup your investment.  $1 clicks equals a ROI in 250 days.  If you produce a good content rich app 200 sessions per day is very low.  Jam-Mobile.com produces and sells many simple but functional apps that produce sessions per day way beyond 200. Mobile analytics build in to your app can give you great information about app usage and more.  We will talk about mobile analytics in a future post.  Lastly all apps are not created equal but hopefully this gives you a framework to begin to evaluate mobile investment.

Project ROI:

$5000 (Project Cost) / $2 (Cost per Tap) = 2500 Taps
200 (Session per Day) * 10% (Tap Rate) = 20 Taps per Day
Return on Investment (ROI) = 2500 (Taps) / 20 (Taps per Day) = 125 Days

BUT WAIT!  If I sign up with iAd I have to share 40% of the ad revenue.  This is true but you don’t have to use iAds or other ad services to have a return on your investment!  We have built custom apps were the client controls the ad displayed and the “click” or “tap” on the ad and resulting link location.  The client keeps and controls 100% of the advertising revenue.

“What type of App should our Business Have?”   - Client Question

I got this question one time while sitting with a potential client.  Initially I was a little confused by the question.  The first thought that popped into my head was “You want a cool app because no one wants to download something that’s bad”.  Yes this type of insight can only be offered by a true industry expert!  After further discussion I realized my client was really asking me:  How do we leverage what we do well and build an app for our business.  Ok I understand now.  

The client, like most, was very excited by the iPhone and the app store and wanted to have some presents in the mobile space.  The excitement is warranted because of the explosive growth in the mobile platforms and the emerging trends.  The client was also understandably nervous because the technology was new and changing.  We discuss platforms, benefits, challenges, and opportunities associated with creating a custom app for their business.  After our discussion it was easy to answer the question:  What type of App should my business have?  The client has a rich database of content that they wanted to distribute on the iPhone and Blackberry platforms.  The marketplace and their customers were asking for their content to be distributed in a new and innovative way.  Ultimately we partner together to build several daily news and information apps that included podcasts, RSS feeds, and featured products.  Additionally the apps were built to have a return on investment by using advertising as a revenue generator.

Every business is different but think about what information your customers would benefit from seeing on a mobile platform?  Web Content, Tweets, Blogs, Facebook Posts, or YouTube Videos?  Would being able to call or locate you right from your app significantly assist your customers and help bring in new business?  


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