{"id":3985,"date":"2016-04-19T20:44:36","date_gmt":"2016-04-19T10:44:36","guid":{"rendered":"https:\/\/flippa.com\/blog\/a-new-investors-guide-part-2-how-to-evaluate-an-apps-market\/"},"modified":"2023-12-27T13:30:13","modified_gmt":"2023-12-27T03:30:13","slug":"a-new-investors-guide-part-2-how-to-evaluate-an-apps-market","status":"publish","type":"post","link":"https:\/\/flippa.com\/blog\/a-new-investors-guide-part-2-how-to-evaluate-an-apps-market\/","title":{"rendered":"A New Investor\u2019s Guide, Part 2: How To Evaluate The Market Outlook Of An App"},"content":{"rendered":"

Let’s say you find an app that has potential — what now?<\/h2>\n

At this point, you are only half way through. What about the market? Is there enough demand? What if the market is already saturated? How does this app perform among the competitors? These are all critical questions to consider when evaluating market conditions, prior to deciding whether to invest or not.<\/p>\n

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  1. \n
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    1. Understanding The Demand<\/b>App Store and Google Play Store are two of the biggest app stores with more than 3 million apps. While some categories (games, photo\/video, social networks, etc.) are already saturated and thus very competitive, others still offer many opportunities. This does not necessarily mean that investing in apps in the photo & video nich\u00e9 would be futile; however, make sure that it is not a clone of the hundreds of photo-filter apps. It is always worth considering an app that has a unique selling point or competitive advantage regardless of its category.Alternatively, if a non-competitive category app has captured your interest (for example a medical industry app) there are a number of methods to predict its success rate. Take note of descriptive keywords relating to the app, check their search volume and how many similar apps rank via Mobile Action<\/a> Keyword analysis tool. Comparing and contrasting these findings will benefit you greatly along with checking the demand for similar apps on Apple Store and Google Play.\"Keywords,<\/a>\n

      It is also a good idea to search these keywords and look for Apple or Google Play Search suggestions. If they don\u2019t show up in search suggestions after inputting some part of the keyword, we can be sure that there is not really demand specific to this topic.<\/p>\n

      \"Searching<\/a><\/p>\n

      In our example, the app that focuses on \u201cmedical cases\u201d may be not worth investing in since there is not really a demand in App Store.<\/li>\n

    2. Understanding The Competition<\/b>Determining the demand for the app in question is very important, however, more often than not, the market is over-competitive.In this case, it is better to focus on competitors and their performance in the market to understand how much potential our app has to grow.\"Determining<\/a>\n

      While we are checking our potential competitors we should also seek the answers to the following questions.<\/p>\n

      What is the apps’s daily download count and\/or app ranking?<\/b><\/p>\n

      This is the first question that helps us to understand how big our competitors are. This tells us how big the market is as well as how many downloads are needed in order to be able to compete with your competitors.<\/p>\n

      \"Apps<\/a><\/p>\n

      How much revenue are your competitors making?<\/b><\/p>\n

      If you know how much revenue they are making, then you can smartly plan your marketing budget and have a better idea about an expected return on an investment. It is, however, very hard to guess the revenue of apps that only have ad revenue.<\/p>\n

      What keywords are ranking best?<\/b><\/p>\n

      If you don\u2019t have a marketing budget for advertising, you need to focus on organic user acquisition channels. 63% of users find and download new apps through search which makes ASO (App Store Optimization) the most critical organic user acquisition channel to focus on. To determine if there is any opportunity to grow organically, you need to find out what your competitor\u2019s top five ranked keywords are, and how popular they are. Then you can have a better understanding of the keywords that you need to focus on, how to use these keywords strategically to gain more visibility at search results and how to get more organic downloads.<\/p>\n

      \"ASO<\/a><\/p>\n

      What do your competitor\u2019s reviews look like? If their ratings are low, what do their users complain about? <\/b><\/p>\n

      Reviews and ratings are probably
      \none of the most critical data points from which you can learn about your competitor\u2019s app since most users reflect their true experience. If they have any problems with your competitor\u2019s app, they will write down every single detail about it which is a great opportunity for others to execute a faster solution than them.<\/p>\n

      \"Mobile<\/a><\/p>\n

      What is your competitor\u2019s user breakdown by country and which countries are most important to them?<\/b><\/p>\n

      If you know the countries where your competitors are strong, then it is easier for you to determine the budget you will need to allocate for each country. A good strategy to grow your app faster can also be focusing on the countries in which your competitors are not dominant.<\/p>\n

      For this manner, I suggest using Mobile Action\u2019s all-in-one competitor intelligence tool<\/a> that provides a competitor\u2019s app visibility, downloads, revenue, rankings, keywords, reviews\/ratings and audience geography for each country for both iOS and Android apps.<\/li>\n

    3. Understanding App’s Position In The Market<\/b><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

       <\/p>\n

      After understanding app demand and checking a competitor\u2019s position in the market, we have to ask the same questions about our own app. In addition, since we have access to Apple\u2019s iTunes\/ Google Play developers\u2019 accounts, we should also focus more on the following details:<\/p>\n

      Carefully read user reviews to fully understand what they think about an app. This is a great way to find out if there are any technical problems with the app and\/or what the reasons are for the user\u2019s dissatisfaction with the app, beyond crash reports.<\/p>\n

      \"App<\/a><\/p>\n

      Carefully read user reviews to fully understand what they think about an app. This is a great way to find out if there are any technical problems with the app and\/or what the reasons are for the user\u2019s dissatisfaction with the app, beyond crash reports.<\/p>\n

      Lastly, you should check App Store views to download conversion rates for the last couple of months. The conversion rate is critical because it tells you how the app actually performs in the App Store search results. If none of the app\u2019s keywords rank in the top five, a low conversion rate could be one of the major reasons. After November 2015, Apple started to determine the keyword rankings in search results for apps based on the ratio of ap store views to download conversion rate. (To learn more about Apple keyword ranking algorithm changes, click here<\/a>)<\/p>\n

      If app views to download conversion rate is 20%, it means that 80% of visitors, who somehow found and viewed the app page, didn\u2019t download it. This is a big loss that neither the app nor it\u2019s owner can afford.<\/p>\n

      \"App<\/a><\/p>\n

      Mobile Action\u2019s Apple App Store average conversion rate report<\/a> says that shopping apps have the lowest average conversion rate with 31%, while ebook readers have a 44% rate. Find out what your app\u2019s conversion rate is and keep it in mind when evaluating the app.<\/p>\n

      After Buying An App<\/b><\/p>\n

      Buying an app is only the first step of an investment. You need to take the right action and invest additional time and money to become more successful than the previous owner. You may need to hire a developer to regularly fix bugs, add a new revenue channel or improve product features. You may also need a designer for app design renewal, screenshots or an app icon. Keep all these additional costs in mind when calculating how much the total investment for an app may be.<\/p>\n

      Evaluating the product and market of an app by asking the right questions before investing helps investors minimize their risks and makes for better investment decisions leading to greater success upon acquisition.<\/p>\n

      This is a guest blog post written by Osman F. Kucukerdem. To read more about App Marketing, ASO and App Store, you can find him on Twitter<\/a> and Medium<\/a>. He can also be reached at osman@appgrow.co<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Let’s say you find an app that has potential — what now? At this point, you are only half way through. What about the market? Is there enough demand? What if the market is already saturated? How does this app perform among the competitors? These are all critical questions to consider when evaluating market conditions, […]<\/p>\n","protected":false},"author":98,"featured_media":1256,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","inline_featured_image":false,"footnotes":""},"categories":[199,33,514],"tags":[],"dipi_cpt_category":[],"acf":[],"_links":{"self":[{"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/posts\/3985"}],"collection":[{"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/users\/98"}],"replies":[{"embeddable":true,"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/comments?post=3985"}],"version-history":[{"count":1,"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/posts\/3985\/revisions"}],"predecessor-version":[{"id":25397,"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/posts\/3985\/revisions\/25397"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/media\/1256"}],"wp:attachment":[{"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/media?parent=3985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/categories?post=3985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/tags?post=3985"},{"taxonomy":"dipi_cpt_category","embeddable":true,"href":"https:\/\/flippa.com\/blog\/wp-json\/wp\/v2\/dipi_cpt_category?post=3985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}