USE CASE

The challenge – accurately measuring user growth

When it comes to mobile apps, it is very difficult to discern fundamental changes that occur within an apps user base – especially if you’re on the outside and don’t have access to information from the developer.

Currently, there are providers of app store data that provide information regarding app store downloads and revenue. Downloads are an important item as nothing occurs until an app has been downloaded by an individual. Additionally, Top Grossing is helpful as it sheds light into where consumers are spending money – another form of validation. While the information is helpful and serves as a guide, it isn’t as useful as it could be.

One factor that is not accounted for and makes it challenging to measure the real growth rate of an app, is user retention. Generally speaking, user retention for the average app at 30 days is approximately 10% – the retention rate only goes lower over time.

The app stores report a download when someone downloads an app. When the app is uninstalled, the app store does not reduce the download figures by the number of uninstalls.

Typically, a business records revenue when they make a sale to a customer. The sale is added to total revenue, the app store equivalent of total downloads. When a customer returns an item to the business, the customers money is refunded and the business reduces its sales revenue. The app store equivalent is the uninstall.  To account for returns, the business reports net sales which is the actual money received for items sold. So app retention is only accounted for by the developer and not by the app stores.

App store data provides the first data point in the story, not the last.

creating a way to calculate the growth rates of mobile apps

Slide Understanding the App Economy Slide 80% of iOS users have less than 45 apps installed Device Storage is a primary contributor Slide Low app counts coupled with among a small percentage of apps high concentration rates Skews app penetration rates to fewer than the top 1% Slide App ownership is HIGHLY Fragmented According to our data Snapchat grew 16.03% from May '15 to May '16 Snapchat's growth slowed by the end of the year 2016 growth slowed to 8.14% Slide Growth Rates by measuring the change in Daily Penetration across time. are calculated Slide These results are tied to known Country populations for iOS and Android devices, to answer specific questions. and penetration information Slide and integrated with We can compare other apps to confirm growth calculations. population data. Calculations are made Make comparisons - see if the data makes sense Slide Snapchat penetration in the US appears to be declining. The information is consistent from June to the end of the year. with earlier calculations showing with Snapchat declining a peak in the YOY caclulations Compare growth rates across similar time frames 6/30/2016 12/31/2016 Slide Finally putting it all together viewing a two year time frame We calculate the user growth at an annualized rate of growth. on a daily basis to arrive

Snapchat files S-1 on February 2, 2017

The Snapchat filing confirmed our calculation methodology used to determine if an apps user base was growing or slowing

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