The statistics say it all. Research shows that more people are in touch through text than through email, and more people own mobile phones than they do credit cards. Indeed, mobile has become the big thing in communication, and almost every business is finding importance in having a solid mobile strategy.
When speaking of mobile strategy, there are a lot of facets that can be considered. There is the basic foundation consisting of SMS, apps, and websites, and there are also more complex facets such as mobile payments and advertising. Choosing which ones to focus on for your business can be pretty tough.
Mobile Apps vs Mobile Websites
One decision many companies face is choosing between a mobile app and a mobile website. While mobile apps are at an advantage in providing a better user experience, it is definitely more expensive to produce than a mobile website. The reason is that creating a website compatible for viewing on mobile phones is easier, however, the functions and features that can be done on these mobile websites are limited.
Furthermore, making a native app that works on an iPhone is different from making one that works on an Android or a Blackberry. If you wish to create an app that works on all three platforms, you will have to build each app, for each platform, from scratch; thus potentially tripling your costs.
Types of Mobile Apps
In evaluating the costs of an app, it is important to consider the two kinds of apps. The first is the income generating kind, which is created for the purpose of generating revenue. The second is the brand building kind, which is created for the purpose of marketing or customer service.
For income generating apps, there are various ways in which revenue can flow into the business. These include charging outright for downloads, in-app purchases, mobile advertising, and subscriptions. Integrating these monetizing features into mobile apps is quite easy. However, for mobile websites, this can be pretty complicated. It means having your own payment solution, which can be costly as well.
For brand building apps, the primary objective is not to generate income but to distribute the app to the target market of the brand. The question that needs to be answered here is how many customers the app will reach?
Alternative Mobile Channels
Text messaging is perhaps the best marketing tool for reach-related strategies. In the United States alone, the penetration rate of text messaging is 68% of mobile phone subscribers back in 2010. This figure must have grown by now. The disadvantage with text messaging is that your message is limited through text, as opposed to mobile websites and apps where rich media may be embedded.
In the United States, the penetration rate of mobile websites is over 36% of all mobile phone subscribers, as of 2010. This is half the people that send messages through text.
Which Platform Do You Choose?
Mobile applications, is a totally different ballgame. In the United States, there are three popular smartphone platforms – iOS, Android, and Blackberry. Apps need to be tailored to each of these platforms in order to enable usage. As of 2010, 6.75% of mobile phone users were on iPhone or iOS, 7.75% were on Android, and 8.53% were on Blackberry. These figures, obviously, have changed in the past years given the growth of sales in iPhone and Android devices.
If you decide to create an app compatible only with one of these platforms, your app’s market will be limited to those who use these platforms. Meanwhile, if you decide to create an app compatible with all three platforms, your development costs will more or less triple. An average ballpark figure to design, develop and deploy an iPhone app would be $30,000.
Return on Investment
Considering these costs, let us study the potential return on your investment for mobile websites, mobile apps compatible with iPhone, and mobile apps compatible with all three platforms. Let us disregard text messaging as a channel given the limited features that can be done with it.
As mentioned, developing a mobile website would be cheaper than developing a mobile app, hence for conservative estimates let us peg this at approximately less than $30,000. The penetration rate for mobile websites, meanwhile, is 36.40%. Given that the estimated number of U.S. adults with mobile phones is 234 million, the potential reach of every dollar spent on developing a mobile website would be approximately 2,800 people.
For an iPhone only app, let us say that development costs is approximately $30,000, more or less similar to a mobile website development costs. However, the penetration rate for this is only 6.75%. This means that the potential reach of your iPhone only app would only be 530 people for every dollar spent, which is considerably less than that of your mobile website.
For an app compatible with the iPhone, Android, and Blackberry, development costs would be approximately $90,000, which is three times the cost of the app described above. However, the cumulative penetration rate for all three platforms is 23.04%. this gives a potential each of 600 people for every dollar spent, which is again considerably less than that of your mobile website.
Conclusions About Mobile Apps vs Mobile Websites
You can reach many more people with a mobile website than a mobile app, considering our conservative estimates. This, however, does not mean that you should not develop an app for your brand anymore. Make sure to revisit your objectives into going mobile and see which channel compliments this better. For instance, if an app user is more likely to buy your product than a mobile website user is, then the costs should be justified. Furthermore, if you are looking into delving into e-commerce eventually, then developing an app might be the way to go, since it incorporates in-app purchases quite easily.