What is ROI for a Mobile App?

I was on a panel on monetizing mobile  at CTIA last week and somebody asked the following question:

"How do I justify the ROI on my mobile spend?"

This is actually something we've come across quite a few times now.  Mobile application spends are currently much lower than they need to be.  At the same panel Christian Lindholm of Fjord complained that companies were routinely trying to get apps built on a shoestring when a comparable design project should have a budget of at least $250,000.  The reason for the difference was put starkly by the CEO of Newser last year when he remarked that they hadn't see the return that justified building a mobile app in the first place.

My response at the panel, and my response now, is that this is exactly the wrong way to be looking at mobile, and this is exactly the wrong time to be trying to work out these numbers.

My first point is simple: mobile apps are here, but they're new.  Asking what your ROI on your mobile app is going to be is rather like asking what the ROI would be on your website in 1998/99 - the fact it you don't know.  But if you don't have something, you've a hole in your marketing strategy.

My second point is more complex and really at the heart of this issue.  People aren't sure what mobile can be yet, but we are getting a really good idea about what it shouldn't be.

Mobile apps are not mobile web sites, and they're certainly not web sites circa 1999 when it was, even then, barely, acceptable to stick some brochure-ware up and call it a site.  In our brand app survey which we're working on at the moment, we're seeing some of the largest brands in the world, ones who have stunning TV, Print and Web campaigns building the most embarrassing apps possible.

The mobile device is unique in how personal it is as a means of accessing data and information.  The web browser, described the other day by Sencha's Developer Guru, James Pearce, as our generation's "Box Radio", is an impersonal "window" onto information.  For most people their phone, especially their Smartphone is an extension of their personality - they have the things they want right where they want them.  They also have access to their friends, their social networks, location information and a host of other things too. 

Consider watching TV.  While the rise of the DVR is impacting how we watch TV, the nature of Twitter is going to save scheduled TV for years to come.  Twitter is the water cooler of the modern age, except you don't have to wait until the next day to discuss what Flynn did on Glee, when you're already following the stream, interacting with  new friends and following new people on the #glee twitter feed. 

The marketing possibilities for the TV companies then become enormous.  That feed and that conversation should be part of your app experience; eyeballs on that feed, should be a part of your app, and the traffic from that app should be fed directly back to you either to come up with new ways to watch - i.e. delivering the best and most interesting of the feeds onto the show in real time, or by creating a social feed later for fans to watch again and follow the conversation they may have missed.

The ROI isn't about the app itself, it's about the opportunity cost of having those eyeballs and fans interacting with your show, brand, organization OUTSIDE of the app experience itself.

Anything else is a wasted opportunity.