ModevCon: Monetizing Your App Beyond Banner Ads, Sponsored App Installs, and In-app Purchases

Editor's Notes

• #2: So its early 2012 and I ask a close buddy of mine…a young engineer...what are you unto? Building an app…Of course…cool, what does it do? Gaming, yup…yup…Clash of Queens…. 3 months later - how’z it going…Great…we just launched it on iOS….1000 installs/day and growing every day… 6 months later…We are killing it...1M installs. 1 year later…there’s a puzzled look on his face. Why,…what’s up? Well, I still get installs but its stagnating…I am adding new features every month, I am even paying for app installs, but I can’t figure out how to get my players back.   They come, they play..they go away…and don't return! And this impacts my monetization….. If this is a familiar problem you face as an independent developer or part of a mobile company…whether its gaming, local, travel, food, music...you are not alone. This phenomenon is common to app developers across the globe and as the number of apps grows it will only continue to grow. Hence the topics today - How should app developers be thinking of monetization beyond the typical paid installs path, or in-app advertising to cross promotion of apps. My name is Deepak Thakral and I am VP of Monetization at Quixey. Quixey is a mobile search company based in Silicon Valley and a search engine for apps. Previous to Quixey, I have a background in Advertising Technology and ran Local search products for YP.com and our mobile apps and web properties $850M in revenue. So BACK TO THE AGENDA….
• #3: Our journey quick synopsis app eco-system Next, case for re-engaging your loyal customers and why that’s important for you in the long run. I will also show you some emerging technologies on mobile deep search and deep linking that are helping with this. Third, talk about cross-promotion of apps new revenue streams Excited…let’s get started.
• #4: Sobering fact…more than half the app developers don’t make enough money to pay their rents…why is that? You don’t want to be this guy……you want to make sure your app works for you…..
• #5: The disappearing middle class of app developers The HAVE NOTHINGS The POVERTY STRICKEN The STRUGGLERS THE HAVES – They have worked their way to the top 100 and enjoy recurring revenue streams
• #6: These are usually hobbyists or first time app creators 24% make 0 money at all…they are interested in monetizing their app…. 23% make < $100/month CLEARLY NOT SUSTAINABLE
• #7: THE POVERTY STRICKEN 15% make 1 – 500 – when you add this to the 47% above, you get the 61% that’s below the APL AGAIN, NOT SUSTAINABLE…..
• #8: More interesting segment…..the strugglers. They have some traction in the marketplace…they probably have 10K - 50,000 installs and some growth Need to update their apps, keep the servers running… Incurr recurring costs What’s the opportunity cost
• #9: THESE ARE THE FORTUNATE ONES… The top 1.6% make more than $500K/app/month Big gaming studios…the larger app development companies They worked their way to the top 100 And there are always the outliers….. Love Kim Kardishian….anyone.. Have marketing dollars to spend Great engaging product
• #10: …consider this as an extreme outlier…but it helps drive home the point. Glu the makers of the app declared that in 6 months of this year…they had 22.8M installs Generated $43M in revenue So if most of us are not Hollywood celebrity material…Kim clearly is. So what do you do? Is it a doom and gloom situation…should we stop making apps.. WHAT DOES THE FUTURE BEHOLD? HOW MANY PEOPLE ARE USING APPS AND…. More interestingly….WHERE ARE ALL THE MOBILE ADVERTISING DOLLARS GOING…
• #12: In Q4 2013, AVERAGE of 30 hours/month, 1 hour a day…on 26 apps… Which apps and categories get the lion’s share of time and attention…. Not surprisingly….its Games, Social and Entertainment….
• #13: Impressive 86% of time is spent on Apps and 14% on mobile browsers…… A third of time is spent on games… Interestingly,,,,17% of all time spent on apps…is on Facebook… So the next question is…we know apps usage is increaseing….what is happening to mobile advertising dollars… There’s a great story over there as well…
• #14: We saw an exponential growth….it grew 78% to $19B….and will grow three folds in the next 4 years to $58B… WHAT’S FUELING THIS GROWTH… Mobile Search Mobile Display Ads – Banner Ads, Video…Interstitials and rich media ads… THE NEXT SLIDE SHOWS THIS GROWTH AND INTERESTINGLY DISPLAY IS GROWING FASTER THAN SEARCH… So if you are an app developer, I think that’s good news… Watch out for video ads…
• #15: WHY IS DISPLAY GROWING FASTER… Simply speaking, larger inventory…all this growth in apps..content…games, social, music…. BUT WHERE ARE ALL THESE MEDIA DOLLARS GOING…. Again…not surprisingly to the top players.. In the industry…
• #16: The next question is is the money proportionate to the time being spent on these apps….. INTERESTINGLY, Google is doing a better job…search Facebook – revenue to usage..
• #17: Here’s the most interesting fast….for a majority of the apps….the revenue earned is less than the time being spend on apps…. So what can we do to help improve this? CLEARLY, APP USAGE IS HIGH, DOLLARS ARE INCREASING….BUT COMNG BACK TO THE APP POVERTY LINE ISSUES….what should app developers do to increase monetization…
• #18: Let’s look at the typical monetization path today….
• #20: Need to add more visuals here…
• #21: You can plug into any of the major ad networks… AdMob Nexage inMobi Millenium Media Ad Marvel Plug in to your app… Generate dollars…
• #22: The second is in-app purchases… Kim’s app makes a lot of money by offering very innotative approaches…buy a house…buy a dog….it goes on… BUT THE BIGGEST QUESTION YOU WILL HAVE IS…HOW MANY USERS DO I NEED TO AT LEAST BE A PART OF THE STRUGGLERS… Let’s say I want to make $8K in revenue/month
• #23: So let’s say you do not have 50K users or 100K installs… But you want to generate additional revenue… So you might think…let’s run an app install campaign and I am going spend money to acquire users – after all, its about LIFETIME VALUE… RIGHT…so let’s consider this…
• #24: Acquisition Cost = $20/active user Annual Revenue = $24 Net profit - $4 per user.
• #25: Acquisition Cost = $20/active user Annual Revenue = $24 Net profit - $4 per user.
• #27: SO INSTALLS IS NOT EQUAL TO USAGE….. NOT EVERYONE COMES BACK SO IS THERE AN ALTERNATE PATH…
• #28: Typically, we are used to seeing DISCOVERY…DOWNLOAD - USAGE… But can there be an altnerate path which leads us to discovering our dormant users and getting them back….
• #29: SO IF I HAVE CONVINCED YOU…that the game is not about installs…but about re-engagement….and waking up these inactive users… HOW DO YOU DO THAT…. WHAT ARE THE NEW APPROACHES…..
• #30: WE WILL SPEND A FEW MINUTES LOOKING AT the concepts of RE-TARGETING, DEEP SEARCH and DEEP LINKING….
• #32: DESCRIBE DEEP SEARCH On a search engine, Searching for Hotels……you see the results. WHAT:S THE USE CASE AND WHAT’S THE BENEFIT? EXPEDIA…is installed on their phone…it actually make sense to prioritize their results to the top…and take them to the deep link 2-3X more likely to do transactions compared to their mobile web application
• #39: Today’s button economy Let’s start with a real tangible example.
• #40: This holiday season, Kevin wants to take his family to Miami (click).
• #41: (show miami)
• #42: In order to make this happen, Kevin has lots of planning to do. He needs to find: Flights, Hotels, Car Services, and Activities (add specific example?) He then has to decide which app to use, open each one and combine all his plans together We’ve all been in this situation before. It’s overwhelming.
• #43: In order to make this happen, Kevin has lots of planning to do. He needs to find: Flights, Hotels, Car Services, and Activities (add specific example?) He then has to decide which app to use, open each one and combine all his plans together We’ve all been in this situation before. It’s overwhelming.
• #51: How this works on our phones (explanation) This creates a seamless experience for Kevin & his family (return a slide to Kevin)