Obstacles you will face in creating niche mobile apps

In the earlier chapters we have shown why targeting a niche audience with a specialized mobile product is a powerful model that fits the modern era of media and technology usage. But it’s not without challenges.

Publishers that venture into this territory will face some obstacles and potential pitfalls.

One is that these specialized mobile products will draw a different kind of audience than a publisher’s core news product.

The audience will be smaller, which is a challenge for advertising reps and sponsors accustomed to the bigger scale of a mass-market product. But the audience will also be more targeted and more loyal, because you are serving a specific group of people a specific solution that is relevant in their lives.

Because of this, publishers will need to reimagine the revenue model that supports a niche app. Try targeting sponsors to whom this unique audience has a unique value. That means selling a high school sports app sponsorship to a sporting goods store for a premium price, rather than selling it to a familiar car dealer or department store sponsor at traditional (low) ad rates.

Publishers may alternatively choose to bundle access to niche apps with subscriptions to the core product. The downside is it may hinder an app from reaching a new, unique audience that isn’t interested in buying the general news product. This notion of reaching new people is critical. But it could win over a few new subscribers who now see more value in the bundle subscription because of the more relevant niche products.

Another challenge to anticipate is that developing specialized software services like this pushes the boundaries of a traditional publisher’s core mission. People who see the organization’s job as crafting and delivering news stories may be skeptical of going in a direction driven by more advanced technology and information services.

People advancing this cause should be prepared to explain to skeptics the realities that make this approach necessary (many are outlined in the overview of this report). And be thoughtful about picking your spots — look for the niche opportunities that do overlap in part with some of your current audience interests and staff competency.

But whatever the challenges, we have reached a point where publishers cannot afford to ignore mobile audience needs and arguably should be prioritizing mobile needs over other traditional platforms.

A majority of U.S. adults now own smartphones, and that share continues to grow. Gartner estimates 1 billion smartphones will be purchased in 2013.

More than a quarter of all time spent with media is spent on mobile devices, now outranking time spent with media on TV or PCs. And half the people in the world go online primarily or exclusively through a mobile device.

Perhaps most importantly, mobile ad revenue is expected to total $11.4 billion in 2013 and more than double by 2016.

The mobile market will be won by companies that serve it best. Starting with a fresh strategy for niche products that help particular types of users fill particular needs in their lives is the best bet.