Meet Mark. He's in the 25-30-year age range and has used your app exactly 17 times. In one session he clicked on an in-app ad for a gambling game. In several other sessions he shared his score from your app on his Facebook profile and through several other social networks. Once, during a limited-time promotion, he looked at an in-app purchase offer but didn't bite. This could mean he'd be willing to consider a similar offer, if the price was better.
Mark is a fictional example of the way developers may soon be able to see their customers. Instead of viewing customers as just part of the mass market, new tools help highlight individuals with unique needs, expectations, tastes and potential for engagement. While most developers don't have the technology or manpower to deal with someone like Mark on a one-on-one basis, they may be able to sort people with profiles like Mark's into groups and target them in a more knowledgeable way. This, in a nutshell, is mobile app audience segmentation, and it's an industry segment that's likely to mature significantly in the next few years.
Just last month, for example, New York-based Appboy quietly launched an audience segmentation product that it said could assist developers in creating more relevant and responsive communications to consumers. The company's platform collects a variety of data points including social media-related information such as number of followers on Twitter and Facebook or Klout scores, along with how often they've used an app, how long they've stayed active and other actions they perform. This data helps developers to create segments such as "high spenders," "passionate fans" or, on the negative side, "recently lapsed users."
According to Cezary Pietrzak, Appboy's director of marketing, audience segmentation is one of the best ways to retain valuable users.
"People are losing their customers in droves," he said. "You can't just focus on [customer] acquisitions. If you get 1,000 users but the actual number of people who stay and use the app is only one tenth of that, you've got a problem."
The concept of segmentation is a key component of what has sometimes been called customer relationship management. Large enterprises like banks, for instance, use expensive CRM tools to better understand who their most profitable customers are. For example, if someone has gotten a car loan from her bank, she might be interested in receiving marketing about the bank's other lending products to get a mortgage for her first home.
Appboy is also in the CRM space, but the developer industry is more centered around simply keeping customers on board, and then looking at cross-selling or up-selling opportunities.
Appboy lets developers target campaigns towards specific types of users.
Appboy is by no means the first to market with audience segmentation for developers, however. Apsalar launched its Advanced User Segments offering almost a year ago, and in August, San Francisco-based Flurry unveiled Personas, which includes 20 different options like "hardcore gamers," "casual and social gamers" and "social influencer," among others.
"We built them around the ways Madison Avenue buys," said Peter Farago, Flurry's vice-president of marketing, referring to the ad spending strategies of major companies. This is not unlike the way that car purchasing data, for example, might be used by insurance firms to see who might be interested in coverage. "The signal strength in our case is much higher because our data set covers a lot of apps."
Flurry sorts users into one of 20 categories like business travelers.
Last week San Mateo, Calif.-based Kii Corp. launched Kii Analytics, which vice-president of products Phani Pandrangi said would enable audience segmentation by offering customizable in-app analytics. That way, if a developer creates an app and thinks of a new area of the audience he or she wants to measure after it's already been released, there won't be any need to make changes to the app itself or re-release it.
"It only makes sense if you're analyzing the right kind of data," he said. "A lot of app developers need to figure out what they want to gather, where it's, 'If only I had thought of that.'"
That said, Farago acknowledged that audience segmentation isn't necessary for every developer. In some cases, more traditional performance-based advertising campaigns based on pay-per-click (PPC) might make more sense, unless the developer has the ability to target a segment in a unique way.
"It's not going to be able to solve the problem of, 'how do I get people to install my app?'" he said.
Pietrzak disagrees. Appboy has been talking with both major enterprises and small startups about its audience segmentation offering, which allows developers to create custom "events" to measure or organize consumer segments that are particular to their app. "It depends on how many segments you have, but you can start getting useful data by the time you get a couple of hundred users," he said. "Of course, the more (customers) you get, the better."
"There is some amount of education that we will have to do. People need to understand the different types of analytics solutions that are out there," he said. "When people understand the need for app data and analytics, the solution itself has to be super-easy to make doing this kind of metric definition and tracking possible."
Developers need to sharpen their skill sets around analytics as much as they need to grow their audience, Pandrangi added. That doesn't mean turning them into professional market researchers, though.