[It takes time for your eyes to adjust when you’ve been blind-sighted for so long. Especially if you are an entire industry. Research Director Andreas Constantinou dissects the market of Application Analytics and discusses why it’s the most underhyped market sector in mobile]
Application analytics has been one the surprises in the mobile industry radar. It’s a market sector that emerged almost out of the blue in 2009 and became mainstream in just a year, fuelled by the mobile app phenomenon.
Why are analytics important? from a developer perspective analytics serve a very simple, practical purpose; that of an optimisation tool that helps increase app downloads and sales. From an OEM and carrier perspective, analytics are a double-edged sword; they offer unprecedented insights into consumer app usage, but they can also leak critical insights to third parties (see the Apple-Flurry dispute). Strategically, application analytics present one of the biggest disruptions on the mobile industry radar; the potential to extract more consumer insights and metrics than can be gleaned through TV, credit cards, loyalty cards and any other medium that has come before.
But let’s take things one at a time.
The spectrum of mobile analytics Application analytics is only one of the three sectors of mobile analytics. Each sector comes with a different set of participating vendors:
– Application Analytics: usage and marketing analytics tools aimed at application developers (e.g. Flurry, Localytics, Motally)
– Campaign analytics: usage and marketing analytics tools for mobile web or WAP sites plus campaign optimization tools aimed at media companies (e.g. Amethon, Coremetrics, Omniture, Bango)
– Service analytics: platforms for mining network or device data to extract service intelligence aimed at network carriers (e.g. CarrierIQ, Neuralitic, Zokem).
The three sectors of mobile analytics differ in terms of probing points, deployment route, sales route, applications and revenue models to name just a few. All in all, mobile analytics is a sector which we expect to see develop over the next 5 years; moreover, it’s probably the most underhyped sector in mobile, as no one can foresee how big analytics is going to get (but certainly many times bigger than TV, billing or other consumer analytics).
Back to application analytics now. When researching the landscape of application analytics vendors we came up with an interesting analysis framework; vendors are positioned differently across the user journey, based on their probing points, therefore the metrics that they can gather, and the types of solutions (or â€˜intelligence’) that the can deliver, as shown in the next chart.
Billing/e-commerce analytics intercept the user journey at the discovery and purchasing touch-points (e.g. Bango, AT Internet). App Store analytics extract data directly from the App Stores (e.g. Distimo). Finally in-app analytics extract data during installation and the application runtime (e.g. Flurry, Localytics, Mobixy).
We surveyed the landscape of application analytics vendors in July and August, speaking to Bango, Distimo, Flurry, Localytics, Mobixy and Ubikod. We â€˜ve summarised the positioning of these vendors in the matrix below, providing the history, ownership/funding, positioning, products, revenue models and installed base for each vendor. Naturally, there’s lots of vendors that we didn’t have time to cover, namely Motally (now Nokia), Appclix (ex.Mobilytics), Apprupt, webtrends, Adfonic, Google, Medialets, Mobclix, Tapmetrics, Millennial Media, LoopAnalytics, ApSalar, Ivdopia, Mixpanel, appFigures and Eqatec.
The comparative table below offers quite a bit of insight into how analytics products from these vendors differ in their background, positioning and revenue models.
[click on image for full table]
It’s only the beginning Despite the hockey-stick growth, the sector of application analytics is still in its infancy. Some key observations are worth highlighting here.
Supply polarisation. There is a very polarized distribution in the installed base with Flurry grabbing more than 95% penetration into iOS and Android apps. At the same time we have negligible penetration for the mass-market of mobile platforms (incl. RIM, Java ME and Symbian).
Solution packaging. App analytics solutions are packaged in two very different forms; firstly pure-play vendors offering analytics as a core product (e.g. Localytics, AT Internet, Motally), where first-party hosting, data ownership and tailored metrics are key issues for customers. Secondly, vendors offering analytics as part of an app recommendations, ad or campaign management solution (e.g. Flurry, Mobclix, Medialets), where targeting efficiency is the key issue for customers.
Convergence with web analytics: Mobile analytics are converging with their web counterpart. This is happening on the supply side (web analytics firms coming to mobile), the buy side (brands deploying both web and mobile properties) and the user side (as the web and the mobile user journey have many intersecting points)
Customer experience analytics is an untapped vertical for app analytics. Purchase decisions, app usage and device monitoring can be leveraged to add unprecedented, granular insight into traditional solutions.
Disrupting consumer analytics. The app analytics value will explode as mobile apps penetrate more engagement channels. Set-top-boxes, media boxes, augmented reality apps and online payments will more and more leverage the phone as a remote control or as an experience delivery medium. App analytics will catalyse engagement monitoring in all these channels and in the process disrupting Nielsen’s TV audience measurement business.
Snowball effect. App analytics is the “snowball” that will pave the way for all other analytics; for many years companies have seen the benefits of deep behavioural analytics, but never before has the route to market been so straight forward. By piggy backing on app analytics, OEMs and carriers can gain access to the richest customer metrics with the shortest distance to customer purchase decisions and the sales funnel. The “Nielsen” of mobile will be a company with application analytics at the core of its business.
In this rapidly evolving market, it is verticals know-how, community-building skills (especially developer communities) and relationships that will determine the real winners and losers. One thing is for certain though; application analytics will bring much-needed transparency and visibility in an industry that has so far been blind-sighted.
– Andreas you should follow me on twitter: @andreascon