In recent years, the UK has emerged as Europe's most profitable mobile app market in 2021, ahead of Germany, France, Russia, and Italy. National revenue from app sales this year was £2.7 billion, accounting for more than half of the total revenue earned through the Apple App Store. In the UK, communication apps are the most used app category after internet browsers. 62% of those surveyed regularly use email, messengers, and social media apps, followed by shopping apps, calendars, and games.
In 2021, consumers in the United Kingdom spent an estimated 1.8 billion British pounds on mobile app downloads through the Apple App Store and approximately 950 million British pounds on apps via the Google Play Store. With 2.8 billion British pounds in total consumer spending on mobile apps, the UK sits in first place as the top mobile app market in Europe among the ones that were examined. Germany comes in second with 2.7 billion British pounds in total consumer spending on mobile apps during that year. France, Russia, and Switzerland round out the top 5 mobile app markets for consumer spending in Europe for that time period.
Thousands of apps are making money, but most of them struggle to make money. Research shows that over 60% of apps are not profitable. App development teams invest significant resources in developing apps, but many fail to monetise them effectively. We explore some of the main reasons UK apps are failing to make it to market and struggling to make money.
A prominent reason apps fail is a lack of thorough market research and understanding of the target audience. According to studies, roughly 42% of an app’s failure is due to poor market research and need. Without a clear understanding of user needs, preferences, and behaviors, app developers may create products that don't resonate with their target audience. Successful apps invest time and effort in researching market trends, analysing competitors, and conducting user research to identify gaps and opportunities.
A fascinating user experience (UX) is critical to your success. Your app should add value to your users, meet their needs, and satisfy your customers. A strong UX leads to increased engagement, retention, word of mouth, and sales. However, many of them lack UX due to cumbersome navigation, scattered functionality, cluttered layouts, a lack of personalisation, slow load times, frequent crashes, and many more. As a result, users quickly abandon apps that don't offer an engaging experience. Investing in UX testing will greatly help apps ensure high quality and customer appeal. These include intuitive design, seamless functionality, and performance optimisations to provide a positive, hassle-free user experience.
Many apps struggle due to a lack of visibility and downloads in the app stores. It takes more than a quality app to gain a foothold. Marketing and user acquisition measures such as social sharing, search engine optimisation (SEO), public relations, and advertising can help increase awareness and installations. App store optimisation with ratings, reviews, screenshots, keywords, and descriptions also improves rankings and organic traffic. Adoption is limited for apps that fail to optimise their in-store presence and invest in aggressive marketing.
A common error some apps make when launching is that they do so without a clear revenue strategy. If, at the time of launch, users expected the app to be free, it would then be more difficult to introduce subscriptions and in-app purchases at a later stage. Relying solely on advertising revenue or delivering intrusive ads can drive users away. Subscription models can struggle if they don't offer enough value or unique features. Poorly integrated in-app purchases or a poor user experience can also lead to the app not being adopted. App developers should consider options such as advertising, freemium, subscription, and paid models upfront to incorporate smart monetisation strategies into the initial app development process.
Many apps miss key revenue optimisation metrics like cost per install (CPI), lifetime value (LTV), conversion rate, and churn rate. CPI looks at how much it costs to acquire a user. LTV measures the potential revenue per user, conversion rate shows how many users make a purchase, and churn shows how many users stop using your app. By monitoring these metrics, app developers and other teams can adjust marketing, features, and pricing to improve the app’s earning potential and performance. Without these metrics, apps have a hard time diagnosing problems and hitting targets.
Launching an app without a clearly defined marketing and promotion strategy can lead to ambiguity and limited user acquisition. App developers often underestimate the importance of app store optimisation, social media marketing, collaboration with influencers, and targeted advertising campaigns. Building a strong brand presence, generating positive reviews, and leveraging effective marketing channels are essential to building awareness and increasing downloads for your app. A lack of ongoing marketing efforts can result in your app not gaining traction or discoverability and not generating revenue.
Balance is very important in any field, and building apps is no exception. Adding the right functionality to your app is paramount. It should have a lot of features, but not to the point that it annoys your audience, rather, it should have a few features that make them want to know more. Apps should have useful features, while cumbersome features should be removed. The feature count is determined after determining the usability of the app and examining the devices on which it runs.
In conclusion, a combination of factors is causing apps to struggle to generate and grow revenue. Lack of monetisation strategies, neglected metrics, poor UX, discoverability, and weak retention plans pose major roadblocks for an app's revenue potential. By following best practices around business models, data analytics, customer experience, marketing, and user loyalty, app development teams have a better chance of overcoming these obstacles and building profitable and sustainable apps.