Return on Investment: Apps and Audiences

On May 3rd, 2011, posted in: different perspective by

During this economic squeeze organisations are being asked more and more to demonstrate good value. For a commercial organisation this is pretty easy – it’s a numbers game where we can simply compare the investment made to the profit generated.

But as we know, in a cultural organisation ‘profit’ might be anything from more visitors through the door to engaging current visitors more deeply, from improved access to the collection to a more diverse audience, all of which can be a little harder to measure.  And it is perhaps because of this challenge and the hypnotising allure of interpretation for ‘low to no cost’ held out by smart phones, that demonstrating value – that all-important ROI – seems to have taken a back seat up to now. But, we think we’re probably at a point where it’s time to change that.

There are a bunch of ways we can measure the success of an app – and here I mean the dimensions measured rather than the research techniques or analytics software – but for today, I want to take it back to the nuts and bolts – the cost per user. We’ll discuss other dimensions in the future but I think this is a great place to start.

ROI on Low to No Cost

In mobile, we’re seeing more licensed or white label software platforms available for ‘low to no cost’. The majority of visitors have their own mobile devices, so that’s the majority of the hardware costs sorted too. Many cultural organisations have loads of digital content these days, so that can be used for free. So the cost per user (measured in this way) must be very high surely – you put your content out there and, if people download it, that can be seen as a success.

So here’s a couple of questions: what is the real cost of these projects? And how much are would you be willing to pay per eyeball (or pair of!)? It’s a cliche I know, but I want you to think about those numbers and hold them in your head while we run through the costs.

Running the Numbers

There are a handful of new platforms offering a ‘free’ service for guides but most are quickly migrating to a licence fee. The fees vary but you might expect to pay around £7,000. The content takes you perhaps 15 days to decide on, pull together and edit plus 5 days to build/upload and test and get agreed with colleagues. Now this might not be cash out the door but if you weren’t working on the app hopefully you’d be working on another valuable project so the cost is real all the same and I’m going to count it. I’m going to call the grand total around £9.5k. And this is before we’ve considered possible maintenance charges for the software, licencing for images or music, marketing, content updates, project management.

But you have a beautiful app and you put it on iTunes for free and 2,500 people download it. So, that’s £3.80 per pair of eyeballs. How does that compare to the numbers in your head? Is that good value? Would you be happy to spend that much on other forms of interpretation?

Focusing on Downloads

Now it has to be said that reducing this budget is possible but realistically an app is never going to be ‘free’ to produce. The number I have a real issue with is downloads. 2,500 is a pretty typical figure we’re seeing for organisations without a major international public profile and quite often this is the number that could be greatly improved by looking at the other side of the equation.

So, why would only 2,500 people across the world download your app? Well, there are a host of reasons:

  • The project design didn’t match the needs of the audience (does your audience have a need or interest in an audio or multimedia tour on their phone?)
  • There was no budget for the marketing of the app beyond a link on the website and a poster in the foyer and got lost amongst the other 400,000 apps in the store
  • The audience don’t own the type of phone you produced the guide for or the ones who own the phones don’t research and plan their visit in advance so they never spotted the app in the store.

But what if we had started from the other end of the equation? What is the you want to connect with and how big is that audience? What are their needs? What would you consider a reasonable sum to spend per person to meet your goals? Could this approach change what you produce and change what you would be prepared to spend?

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