App developer Q&A: Publishers should develop for iPad first due to revenue, readership

January 21, 2011
Category: Uncategorized

Publishers getting started in mobile should build an iPad app first, says William Tallent, CEO of app developer Mercury Intermedia.

He argues that the iPad can generate ad revenues 10 times higher than the iPhone, making an iPad app a better investment.

Speaking at a Reynolds Journalism Institute conference last month, he pointed to evidence that iPad apps, on average, have session times 2.2 times longer and advertising rates five times higher than equivalent iPhone apps.

Tallent told attendees that those readership and revenue patterns mean an iPad app with 50,000 active monthly users could produce more than $2 million in annual profits. Even with higher development costs, the iPad will generate better returns, he said.

Mercury Intermedia has developed apps for media companies including USA Today, Showtime and Sports Illustrated. In this edited e-mail interview I asked Tallent to share his observations after a year of working with the iPad.

Damon Kiesow: How do you define mobile? Is it a laptop, smart phone, tablet?

Bill Tallent: Mobile is a misleading term. What’s afoot is the dawn of the fourth generation of computing: Touch Computing. Touch computers lack power cords, physical keyboards, and mice. They are ultra-portable, ultra-practical and ultra-personal — much more so than so-called “personal” computers. They are as easily used by elders as children. And, they use a wide variety of screen sizes.

What characteristics should publishers focus on when developing for mobile platforms?

Tallent: Exceptional user interface design, application speed, and application reliability are basic requirements to attract and hold a good audience.

Over time, new features must continually be added to expand user base and engagement time. Good apps require 90 to 120 days to design and build, and the process should never be rushed.

Apps should be considered investments, not expenses, and evaluated based on the financial return — just like printing presses.

What are you seeing in terms of consumer behavior on these devices? What is a typical usage pattern for a smart phone vs. a tablet?

Tallent: A handheld touch computer will be used slightly more often than a tablet, and used relatively evenly over the day. A tablet-style touch computer will be used mostly at home.

A tablet computer will generate 75 percent more usage minutes per month than a handheld computer.

Tablet computer ads garner up to 5 times the CPMs [cost per thousand impressions] of handhelds, and up to 10 times the revenue of handheld computer apps. Both [tablet and phone apps] should offer ads and subscription plans. Neither should depend on ads alone because CPMs will continue to erode over time.

Based on consumer use, what type of content is best suited to smart phones and tablets?

Tallent: Handheld computers (meaning smart phones) are for info-snackers. Tablets are for relaxed, more extensive news consumption. Use the same content for both, however. Let the user decide how much they want to read on each.

What is the right balance of text and multimedia or other interactive content in tablet apps?

Tallent: Users do react well to interactive features such as polls, crosswords, etc., but, again, remember that the user is there to consume news. Everything else is subsidiary to that main purpose. Make the news easy to consume, sans interference by ads and technology, and make the interactive features easy to find.

Are native apps the long-term future for publishers?

Tallent: No one knows the answer to that. However, it’s instructive to remember that commercial computing has been around for 60 years, and for 50 of those 60, apps have been the predominant form of computing. The Web is a relative newcomer. Right now, native apps win the day hands-down, so develop them for your users instead of trying to guess the future.

Do you see HTML5 Web apps getting a foothold, at least on tablets?

Tallent: HTML5 holds promise, but won’t gain major traction anytime soon. So, keep your eye on it, but don’t expect too much, too soon. Focus on what works, native apps, for now.

How do publishers support native apps on multiple platforms and devices, as well as mobile and desktop sites? Is that practical?

Tallent: The costs of building and supporting native apps on multiple platforms is but a small fraction of the cost of printing presses, delivery trucks, and paper boys/newsstands. Presses/trucks/people to run both cost tens of millions of dollars per year. Apps cost but hundreds of thousands of dollars per year. People forget just how expensive presses, trucks and people are. And apps, properly built, generate so much revenue in comparison to their cost, they have handsome ROIs. So, no need to worry, unless you decide to do nothing.

What is your approach to recurring subscriptions for mobile apps? When will publishers and Apple come to some agreement on that issue?

Tallent: When Steve Jobs is ready, we’ll know.