Brief:

• Most companies (88%) say their mobile apps are a "financial success" and can be considered profitable because they've earned back their development and launch budgets, according to a survey from The Manifest. Measuring profitability can vary, with some companies attributing lead generation or a lift in brand awareness to their mobile apps, the report suggests.
• Marketing is a key part of establishing an app with 35% of companies saying they dedicate 31% to 50% of their total app development budget to promotional activities. Another 21% of businesses spend even more (51% to 70%). Just over a third of businesses spend $50,000 to $100,000 to develop and launch a mobile app.
• More than a third (38%) of companies update their app every month, while almost 45% update their app every two to six months. Updates are necessary to maintain usability and engage users. The Manifest surveyed 301 app developers and marketers from various sizes of U.S. companies.

Insight:

The Manifest's finding that more than half of companies dedicate 31% to 70% of their total app development budget to promotional activities demonstrates the importance of good marketing for apps to get noticed among the 3.8 million apps for Android and 2 million apps for iOS devices. Revenue from app marketing has jumped 80% since 2016, but developers face greater challenges in boosting user loyalty, retention and profitability, according to a June report by measurement platform AppsFlyer.

The survey's finding that an overwhelming number of companies describe their apps as profitable appears to contradict past studies, like one from Gartner that said less than 0.01% of consumer mobile apps will be considered a success by their developers. But not every company seeks to build an app-based business that relies on advertising, subscriptions or in-app payments to generate revenue. Many companies create apps as extensions of their brands and customer service or marketing functions while they make money from other activities.

For companies that seek to build a mobile audience and monetize a user base, The Manifest's survey has several important findings, including the importance of updating an app to fix bugs, test out new features and make adjustments based on user feedback. For example, Facebook-owned Instagram in 2016 changed its app logo and irritated thousands of users, while others complained about a change to user feeds that showed posts based on an algorithm, not in chronological order. Instagram rode out the storm of protest without any long-term effect on its user growth to more than 1 billion people worldwide. In contrast, Snap this year redesigned Snapchat, alienating thousands of users, and its user base shrank for the first time in company history.