CaddieOpen in CaddieDownload for Mac

🧐 Market Research for an App - Save time and money with this tip

Shared by Caddie Library · Updated
App Masters10:48Open on YouTube
Chapters show their main points

The bottom line

Check what the top apps in your niche earn, using free tools like App Annie and Sensor Tower, before you build. If the leaders make hundreds of thousands to millions per month, the market has room for you.

Key takeaways

  • Top grossing charts show which app categories make money. 1:38
    • The charts count in-app purchases and subscriptions, not ad revenue, because Apple and App Annie have no access to ad data.
    • Netflix, Pandora, dating apps and Candy Crush style games sit at the top, and health and fitness is led by Calm and Headspace.
  • Search traffic for your keyword shows whether people want the app. 3:37
    • In Sensor Tower, a traffic score above 5 counts as decent. "Celebrity voice changer" scores 6.5.
  • The revenue of the top five or six apps shows how big the market is. 4:07
    • The top celebrity voice changer app made about $2 million in July 2018. Sensor Tower estimates are accurate to within 20 to 30 percent.
    • In meditation, Calm makes $3 million, Headspace $2 million and Simple Habit $300,000.
  • Aggressive subscriptions usually drive the biggest revenue numbers. 5:41
    • Download the leading app and see how it monetizes. The store listing confirmed the voice changer app is subscription based.
  • A weak lower-ranked app tells you which niches to avoid. 8:49
    • Sleep Cycle makes about $500,000 a month, but Sleep Easy, ranked 99th, makes under $5,000.
    • In the voice changer niche the revenue also drops from $2 million to a few thousand dollars after the leader.

If the top players are making hundreds of thousands, if not millions of dollars per month, then there's definitely room for you.

Steve Young, App Masters

Chapter summaries

0:00 Validate the idea before you build

Checking what competitors earn before you build saves time and money.

  • Competitor earnings show whether an idea is worth building. 0:36
    • The same process also works if you have no idea yet.
    • It reveals which types of apps actually make money.
    • Every tool used is free.

1:13 Finding ideas in App Annie

App Annie's charts and categories turn a vague idea into a concrete app to study.

  • Top charts, then categories, lead you to a specific app to study. 1:46
    • Music, games and social networks fill the category lists.
    • Browsing there turns up a celebrity voice changer app.
    • Happy Glass and Hello Stars are in the top charts but not top grossing.
    • The general picture is enough if you are not making a game.

3:30 Sizing the niche in Sensor Tower

Reviews pick the competitors to check, and their revenue shows who really wins.

  • One leader takes most of the money in this niche. 4:15
    • Reviews pick which apps to open, though they can be gamed.
    • The second app has no advertising and likely relies on ASO traffic.
    • The leader advertises on Instagram, and Sensor Tower shows those videos.
    • The third app earns under $5,000.

5:24 Reading the charts for room to enter

Top grossing charts by category show which niches pay and how much a smaller app could realistically take.

  • Browsing categories shows which niches work. 6:31
    • Health and fitness is a big category, and weight loss and meditation fill it.
    • Many meditation apps do well, so a meditation app becomes an idea.
    • Headspace runs YouTube ads, and the ad examples are visible in the tool.
    • 10% Happier ranks lower on the list but still earns about $200,000 to $300,000.
    • Two meditation apps are already over the $2 million bar.
  • A modest share of a proven niche is enough. 7:15
    • The goal is to sneak in and make $10,000 to $20,000.
    • Winning 10% or 20% of a leader's revenue is already a good result.
    • A similar app, not an exact copy, can be released with some advertising.
    • The second voice changer app made about $90,000, which also shows room.

8:36 Checking the floor and running the process

Comparing the bottom of a niche with its top, and checking search traffic first, shows if an idea is worth building.

  • The weakest ranked app shows what a failed entry looks like. 8:38
    • Scrolling to the bottom and searching Sleep Easy gives a poor example.
    • Its low income makes sleep apps a niche to stay out of.
    • Sleep Cycle tracker is the most popular app in that niche.
    • Seeing both ends gives a sense of the whole market.
  • Analyze competitors before building anything. 9:21
    • List the keywords that fit the app and check their search traffic.
    • Then look up the top five or six apps in Sensor Tower for their revenue.
    • Low revenue at the top suggests the market is too small.
    • The check costs nothing and comes before any development spending.

In the growth library

Steve P. Young, Founder of App Masters, an app marketing agency. A walkthrough of validating an app idea before building, by using free tools like App Annie (the transcript's 'a penny') and Sensor Tower to see which categories and competitors actually earn money. It shows how checking top-grossing charts, keyword traffic and competitor revenue can reveal whether a niche has room, with examples like celebrity voice changers at about $2 million and meditation apps at $2 to 3 million.

More from App Masters · The whole library, and ask it anything

Transcript287 lines
0:00

coming up want to know how to do market research for your app idea well I'm gonna save you a ton of time and a ton of money by showing you a simple process that you can use to validate your app idea before you even build it to ensure that there's a big enough market for it stay tuned what is a bap nation it is Steve P Jung founder of that masters dot-com and in this video I want to show you a simple process that you can use to validate your app idea and kind of see what your competitors or those in the space are actually making how much money they're actually making in the app business and it's one of these key things that you should be doing when you first have your initial app idea and if you have no idea in mind on what type of app to build well this simple process will show you what types of apps are actually making it or making money in the app space so let's get into the computer so the first

1:13

site I'm gonna show you is a penny now all this is all free all the free tools now a penny here's what we're gonna do I'm already logged in and I'm gonna see an overview but we're gonna go here into the top charts I want to click this okay and now here you can see the overall apps all the top apps that are making money now this is the part that I'm gonna pay attention to this is top grossing now it doesn't take into account this top grossing ad revenue right so you can see certain apps like these happy glass hello stars these games that are in the top charts but not in the top grossing that's because app Annie and Apple they won't report the top earners from ad revenue because they don't have access to this data so this is primarily through in-app purchases subscriptions and the like and so that's what you're gonna see as a top grossing right but this will also give you a sense of what types of apps are actually making money

2:13

so you see a lot Netflix for tonight obviously Pandora music dating entertainment some candy crush games so these are a lot gonna be these group the money that they're making are going to be dependent on in-app purchases and that's what Apple and a penny are reporting now I know what you're saying well it's hard to really predict you know how much money the rest of the apps are making and how much ad revenue but if you're not making a game well this will give you a general sense of kind of categories you should be creating okay let's get into more a little bit more details right now now what you can do is actually go into categories so now that you're studying this you've seen okay there's some games here title I don't know what this is let's click into this let's see what this app is all about title says play and discover songs and videos okay so a lot of music stuff is here looks like a lot of music there's

3:05

some games social networks mule alright there's a lot of different games and types of apps here so now you're like hey well I have this idea for a I don't know celebrity voice changer so look at this right so now you can see Wow celeb reverse changer hmm maybe I could do something off this realm so now what we're gonna do is now you figure in an app like you found an app that's kind of cool we're gonna go into Center tower now again you can do this for with all the free stuff out there and we're gonna look for this keyword so celebrity voice changer now I'm gonna assume that's the ideal keyword because you know they have it in their app name so pretty decent traffic 6.5 right anything above I would say a5 is pretty decent traffic now you see a lot of different apps off there of the top three or Flitz a5 and I'm gonna go off of reviews even though they can be gained I'm gonna go off the reviews

3:58

and see how well they're doing right so I'm gonna go in and click this I'm gonna open a new tab for this and then within sensor tower they could tell you the revenue so this is July 2018 as of this recording they they made about two million dollars and this is pretty accurate no give or take a few percentage points like anywhere from twenty to thirty percent what I've seen with my apps in there and within sensor tower these are pretty accurate this is pretty accurate data so it's two million dollars like well that's pretty good for a top dog let's see what the second guy is doing six thousand it's a real big drop-off see we see twenty thousand in July versus 1 million and two million dollars and they're not doing any advertising but there's probably reliant on a lot of ASO traffic to get them the downloads so that's probably how they're doing it these guys obviously are you can see here with in sensor tower these

4:49

are advertising on Instagram so you can click this video and you can even you can see what they're doing on Instagram those have been videos so let's see what the third one says now this one doesn't have that many views I'm gonna click on this one instead just to see 148 because they have a little bit more reviews and the rankings a little bit higher as well so they're doing under 5,000 they're not doing that well either it looks like it's the big dog that's winning let's click on these guys cuz they've got one hundred and seven thousand so boys change your plus I'm gonna click on this so these guys did 90 thousand so now I would start thinking about okay well there it seems like there's a big enough room in the marketplace for an app like this right and two million dollars a lot of money they're probably spending a lot of money to to drive that but I would download this app and then see how

5:46

they're monetizing what are they doing are they you know they're they have a pop up screen that says hey want to sign up generally that's what I found when I see these type of revenue numbers is they're you they're pretty aggressive with their subscription so it's usually subscription and they're usually pretty aggressive but here's where you can see unlimited usage unlimited usage so that's not very much telling of what type of in-app purchases there are but it i can assume because of the money they're making it's probably a subscription-based service let's see if they have it in the description anywhere no no it is so subscriptions are managed so here it is so it is a subscription-based business and that's how they're able to generate a lot of money so that's one way you can look at the top charts i'm gonna go back to a penny real quick and then I'm gonna go into different categories as well so

6:34

let's say health and fitness you know it's big category that a lot of people want to be in and then say comm Wow okay column number one so with Kayla headspace all these have really really high grossing numbers and what we can then see is figure out okay what types of categories are working so now you can see let's it's all like weight-loss meditation so there's a lot of meditation apps that are doing really well and then you can start categorizing hey maybe I can create a meditation type of app as well so now let's just scroll down a little bit and let's see from a met patient perspective let's let's see how the apps are doing here so I'm gonna put a meditation and then you can start clicking through so is there volume is there a room for this right can I can I figure out a way to sort of sneak in and start making anywhere from ten to twenty thousand dollars this is what I'm trying to figure out now celebrity voice changer

7:29

one person's making two million dollars that tells me that hey there's a real market for this then I could possibly create an app sort of similar to it and they're not necessary but create an app very similar to it and then maybe get it out in the App Store run some advertising on it and start making money because you know if I can grab let's say 10% or 20% I'm actually doing pretty well from these guys we're in meditation right now I'm gonna click through a few of them just to see how much they've been making so we've got simple habit at three hundred thousand we've got headspace at two million you can see they're running ads on YouTube so you can see where they're running ads on the types of ads we have Colm making three million so by far the biggest that tells you you know like there are people making a lots and lots of money so you have two apps already over the two million bar and then what I'm gonna do

8:17

is just scroll a little bit more because I know 10% happier was one of the other meditation apps that was higher on the list from the top grossing like right here some click on that one even though they're not number they're not that high for meditation so I'm gonna click on that one as well they're making 200k that's not bad 300k so let's see what the worst one is doing so now I'm gonna scroll all the way down and I could try to find a meditation or I could just try to put sleep easy let's try that alright so sleep Z I'm gonna come here no one see okay well that's like the lowest one of the this is number 99 of the top grossing so let's see how well they're doing and type of app okay sleep cycle tracker I've heard of this type of that before so I've seen this before like this one is the most popular one I'm gonna click on this just to see how well they're doing they're doing 500k a month and let's see what sleepy sleep

9:08

seats doing as a 99 so they're doing a little bit under 5,000 which isn't you know a lot so it would that might be one that I might stay out of but you know you get the sense of where we're headed with this you can start to really analyze what other apps are doing before you start even building yours so if you have an app idea you know like hey these are the type of keywords that I think would fit perfectly for my app 1 see what kind of search traffic there is and secondly the top five or six apps look at the data on sets or tower to see how much money they're actually making and if they're not making that much maybe there's not a big enough market for it but if the top players are making hundreds of thousands if not millions of dollars per month then there's definitely room for you so question for you guys let me know what you thought about the video how you're doing market research what kind of ideas

10:01

that you have and let me know in the comments below how you're doing your market research are you just looking at the App Store are you looking at different tools if you are using the tools please let me know what they are as well and if you got a question for me make sure you leave it in the comments I read all the comments I'm gonna start creating more videos for you based on the comments you leave and what you want to see in these videos so next time make sure you hit like make sure you subscribe and do all that fancy-dancy YouTube stuff and I'll see you on the next video click here if you want to check out our pre-launch marketing strategies playlist and also click here down at the bottom if you want to learn more about the metrics that you need to focus on during your soft launch