Instant apps are publishers’ newest ‘frenemy’ when it comes to monetization

Since the dawn of the iPhone, Apple has been designing, revolutionizing and, to some extent, controlling the way people interact with their mobile devices through a marketplace known as the App Store. When the App Store first opened, there were 552 apps. Today, there are 2 million iOS apps, and 2.2 million apps available in Android’s Google Play store. Needless to say, getting a single app noticed in a sea of 4.2 million is far from simple. What’s more, individuals tend to use only a limited number of apps per month, and most of their time in apps is concentrated across a very small number of them, making the job of app marketers even more difficult.

Apps have become the foundation of mobile life. “There’s an app for that!” isn’t just a slogan, it’s a lifestyle. You want to easily book a hotel room from your phone? Download the app.

This could soon change, however, with Google’s introduction of Android Instant Apps, which let people use apps without having to fully download the app. Google’s Instant Apps seem positioned to disrupt monetization efforts for Android developers by blurring the lines on how to define engagement and chipping away at the broader app store economy — making it publishers’ newest frenemy on the block. Let’s explore the hows and whys…

You… you’ve got what I need

Google says it’s “just a friend” trying to help developers bring users into their Android apps quicker, but more likely, Google is working to redirect people’s attention back to the mobile web. As the leader in advertising and search, Google made its name (and money) on the web and wants to keep as many people using it, whether on desktop or mobile.

Currently, only 27 percent of app installs come from search, which is the third-ranking form of app discoverability behind friends and family and browsing the app store. By downloading apps, users are leaving their search engine, most likely Google, and giving the newly downloaded app their undivided attention. Up until a few years ago, Google was unable to index information within apps, so that content didn’t show up in search results and Google wasn’t able to fully monetize from apps.

By distilling down to a single app feature, Google is not only providing a quicker way for users to access the best feature of an app while saving phone memory, they are also able to keep customers in the Google mobile web ecosystem, allowing them to collect more information, enhance their services and make money through advertising. In this respect, Android Instant Apps may diminish a publisher’s opportunities to monetize through in-app mobile ads because people no longer need to spend time installing and using the app on a regular basis.

Publishers’ solution, disguised as a problem

The three most popular monetization strategies for mobile publishers are paid (where someone buys the app), in-app purchases (where someone pays to unlock content or remove ads) and in-app mobile advertising (which includes the videos and banners that pop up every so often). If popularized, Android Instant Apps runs the risk of threatening these three monetization pillars: Why would someone want to pay for an app if they can access it quickly and ad-free via Google’s mobile browser?

Every technological innovation brings with it new security concerns.

App developers face challenges larger than what falls under these three pillars, however. It’s no secret that app retention rates are low, with around 25 percent of users only using an app once after 90 days. Some have argued the app boom is over, as people have been shown to download zero new apps per month.

With Instant Apps, app sharing will involve less friction — when a friend shares a link to an app, you won’t have to go through the rigmarole of launching the app store and wondering if it’s worth using up space on your phone to install. Instead, users can quickly launch the Instant App and access its core features and content.

For example, when sharing a link to a Buzzfeed recipe with a friend, that friend then clicks the link and it launches the Instant App, where they can view the shared recipe quickly and easily. Android Instant Apps could also help publishers expand their existing user base by modularizing their app into different Instant App versions — and in the oversaturated app marketplace, a chance to increase discoverability is always welcomed.

Unfortunately, Android Instant Apps might simply discourage users from downloading the app altogether. And publishers may need to reassess the way they measure engagement — for a streamed instant app, publishers won’t be able to measure engagement by time spent using the native app, and so will have to measure by goal.

For example, a hotel app may see more rooms booked, or Starbucks may find more customers paying through their mobile platform — why take the time and space to download a ticket-booking app you only use a handful of times a year for concert tickets when you could stream it on Instant Apps? Apps that offer a service of this sort, then, may see increased sales as a result of Instant Apps.

While downloads might initially fall, user engagement and retention could increase once people are exposed to the value and usefulness of your app through the mobile web. And a more invested user may be more likely to make in-app purchases and stick around longer, increasing the number of impressions for ads.

What’s next?

At this time, Android Instant Apps are available on select devices running Android 7.0 Nougat, and are being tested by several large companies, including Disney, Medium and Hotel Tonight. Instant Apps, so far, have been loading as fast, if not faster, than mobile web hyperlinks, while providing similar functions as an app. If the speed and product continue to deliver, the future of app development might include Instant Apps as part of their core code, changing the way apps are discovered and delivered. Apple may even include a similar capability for iOS apps to stay competitive with Android.

However, every technological innovation brings with it new security concerns. Google has added pop-up permissions for apps that collect particularly sensitive information, but this feature could allow a malicious developer to run arbitrary app code on a device without prior user consent. What’s more, one may wonder if there’s an inherent inefficiency with web apps: The necessity to run JavaScript and the like instead of native code, the need for cross-platform compatibility and lackluster APIs compared to the ones available to native apps limit what can be done with web apps. Though it’s still too early to determine if Instant Apps are here to stay, one thing is certain: Users want their content delivered to them fast, and Google is on a mission to do just that.

The definition of a frenemy is someone you remain friendly with, often for potential gain, despite a dislike or rivalry. Android Instant Apps may mean that users download less and potentially spend less time in native apps, but they also break down barriers to entry and expose parts of your app to a broader audience, which may ultimately convert them to your product — for the long haul.