Report: Top 10 App Trends of 2011

Mobclix, an iPhone analytics firm and mobile ad exchange network, has released a year-end report which examines the top application trends from 2010. The report, called the “2010 App Game Changers,” neatly summarizes what have been some of the most notable developments in mobile over the course of the year.

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According to Mobclix (full report here), mobile apps have impacted a wide range of industries from advertising to gaming over the course of 2010, have become a part of our daily life and, per IDC analysts, will increase to nearly 76.9 billion downloads by 2014.

Citing both its internal research, and the research put out by other analyst firms, Mobclix has boiled down the many changes in mobile, specifically in the mobile application industry, in an easy to digest format by way of its year-end report.

Here’s what they found, summarized below along with some additional comments from us.

1. The Platform War Gets Bloody

2010 was the beginning of the smartphone platform wars, with the ever-dominant Android vs Apple fight now underway. Mobclix saw impressions on its Mobclix Exchange for Android grow by 420% since its inception, for example. Other players, like Windows Phone 7 launched this year, apparently in it for the long haul, while Nokia, RIM and even Palm are hoping to not lose ground as the mobile platform shakeup continues.

2. Advertising on Mobile Gets Smart (Rise of RTB)

At least 50% of all targeted online display ads will be bought through real-time platforms by 2015 and by next year, 10%-15% of total ad buys will involve real-time bidding inventory. Mobclix, of course, offers a solution for this, but cites a “Google executive” as the source of this factoid.

Despite the self-promotional aspect to this trend, RTB is a major trend this year. As Business Insider summarized this summer, “RTB is on fire.” AdMeld, an ad inventory optimizer, closed a $15 million round of venture funding this year, AdSafe raised $7.5 million and Google bought Invite Media, a demand-side platform, for a reported $70 million. AdMeld CEO Michael Barrett told BI that ads sold through RTB generate 2-3 times as much revenue for his customers on average, and up to 10 times as much in some cases. He said the market would be worth around $1 billion this year.

3. In-App Purchasing Enabling a New Economy

Selling apps is no longer the only way to make money, some developers have discovered. In October, Flurry released data that showed in-app purchases were earning developers in certain categories (games, social) more money than ads. Another report forecasted an increase in in-app revenue by 600% in 2011. And Farmville, as a high-profile example of this trend, earns 90% of its revenue from in-app purchases, its Director of Mobile Jen Herman has said.

Mobclix cites data from Jupiter Research which says that in-game purchases are expected to surpass $11 billion by 2015. The industry is watching Android expectantly in 2011 to see if it will soon offer an officially supported feature for allowing these types of transactions. In the meantime, there are 3rd-party solutions that let developers implement in-app purchases now.

4. It Pays to be Pushy

Another finding, this one from a Mobclix survey, found that customer retention is 2.7 times better with push-notification. Apps are opened up 228% more and weekly session times have increased by 103% when push is used. However, Mobclix is referring to incentivized installs, not notifications from the apps themselves. For example, a publisher serving a notification pushes an app suggestion to its users, offering them something in return (virtual goods like health, gold, etc. in a game, for ex.). The advertiser pays for every install this push message led to while the publisher makes an immediate profit.

5. Apps are Here to Stay

More than half a million apps are downloaded every hour and the average smartphone user has 22 of them, says Mobclix, citing a Borrell Associates data. But apps are ready to expand beyond the smartphone to appear on TVs (Google TV, Apple TV), desktop (Intel AppUp, Mac App Store, AllMyApps for Windows, etc.) Web browsers (Google Chrome Web Store, Mozilla Open Web App Store, etc.) Blu-ray players and even cars (Ford SYNC AppLink, Android?).

6. Rich Media Ads Pay More

Another self-promotional, but accurately pegged trend: rich media has a higher clickthrough rate, up to 11 times higher, says Mobclix. We cited data from Greystripe in September that found rich media ads get a 56% higher clickthrough rate than static ads, however.  And Eric Litman, CEO of Medialets, told Mashable in August that rich media ads were getting clickthroughs as high as 33%. Who’s telling the truth? Maybe they all are, the differences between their various networks leading to differently reported data. But the end result is the same: rich media means more clicks.

37% of impressions in Mobclix’s exchange were rich media, up 115% since last year, the new report also noted.

7. Apps Aren’t a One-Trick Pony

Apps don’t just get played with once, then ignored – at least, not in all cases. Some app developers have found that constantly re-engaging with your users can lead to a long-term relationship, says Mobclix. For example, Angry Birds launches an update every 4 weeks and sees a 80% retention rate.

8. Games are King

70% of the chart-topping applications in both usage and gross revenue are games, says Mobclix, citing its own data. Games dominate on every platform, from Apple’s App Store to Android Market and even on newcomers like Windows Phone.

9. Apps are Everywhere

This trend seems like a repeat of #5, as it reports on the status of apps in our daily life. The average smartphone users spends 2.8 hours per day using apps and 3 in 5 people first turn to an app before searching the Web, says Mobclix, We also reported on apps’ growing popularity over the browser this year, referencing research from consulting firm Parks Associates. They found that consumers under 3 (“millenials”) are ditching the Web browser in favor of mobile apps.

10. Don’t Underestimate iCurrency

The title of this trend is somewhat cutesy, but also accurate. It’s actually referring to the revenue opportunities via iTunes. Apple has driven over 10 billion downloads of digital content through iTunes this year, says Mobclix, delivering over $1 billion in earnings to developers. It’s still the behemoth in the mobile app ecosystem and can’t be ignored.

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