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Sandeep Amar on Monetization of Apps at ad:tech Bangalore

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Sandeep Amar on Monetization of Apps at ad:tech Bangalore

  1. 1. Monetization of Apps Sandeep Amar
  3. 3. Smartphone sales overtook PC sales
  4. 4. Tablets sales will go past PC sales
  5. 5. Time spent rising fast
  6. 6. Mobile usage for Pandora, twitter over 50%
  7. 7. Mobile internet adoption growing
  8. 8. Smart phone users are potential buyers
  9. 9. Perception about mobile advertising
  10. 10. Actions taken after seeing mobile advertising
  11. 11. Gartner’s research• 46 billion mobile app downloads this year, 89% will be free.• Number of downloads has nearly doubled, up from 25 billion downloads in 2011• 90% of all paid apps in 2012 have been priced at $2.99 or less (lower than 2011)• Apple’s app downloads have grown by 74% over 2011.
  12. 12. Gartner’s research (cont.)• The overall app market is estimated to have grown by 83% over 2011.• In 2012, revenue from paid downloads, including in-Apps will be $20 billion compared to just around $6 billion from ad revenues.
  13. 13. OPA research• Smartphone adoption in the US is expected to reach 57% by 2013• 93% of smartphone users access content and information on their smartphone regularly.• 84% of smartphone owners use their mobile phone or tablet while watching TV• 24% of smartphone users have purchased some sort of content on their smartphone.
  14. 14. Android Vs. iOSAndroid is winning in numbers and coming close in monetization
  15. 15. Android leads over iOS
  16. 16. iOS still the leader in revenues
  17. 17. India android phones – 0.5 million amonth market No of units sold/month (000) Pp growth (%)
  18. 18. Everyone knows the audience is there, and that they are spending a lot of time in the apps it’s new media
  19. 19. App Monetization• Paid apps – Games – Utility apps – Content• In-app purchases and virtual goods – Subscription – Pay to play – Commerce – virtual goods – Commerce – real goods• Mobile advertising – Ad networks – Direct display – Custom apps for brands
  20. 20. Casual users are going to go the freemium route and use apps toentertain themselves for short stintsWhich makes mobile advertising and in-app purchases very important
  21. 21. Monetization strategies need to beconceived from the very beginning. It has to be the driver of development and design process.
  22. 22. A great app(game/content/utility) could ally with a mobile advertiser and integrate the brand attributes in app logic and designBut the first priority should be best gaming / usability / entertainment experience
  23. 23. Times internet case study• The Times of India(TOI) and Economic Times(ET) app• Key focus: – Product experience, design and usability – Grow the base to a substantial number(before going for advertising sales)• Premium publisher model – Focus on sponsorships – Not going through ad networks, dedicated sales teams for mobile monetization
  24. 24. Key results• TOI: – 11 million UVs on mobile (including mobile site) – 4.5 million app downloads across platforms• ET: – 3 million UVs on mobile (including mobile site) – 1.5 million app downloads across platforms
  25. 25. Type of ads• Banner ads• Inline videos• Rich media
  26. 26. The mobile screen is really small…
  27. 27. Challenges in Mobile ad buying
  28. 28. Mobile CPMs are lower
  29. 29. Mobile advertising still a fraction ofdigital advertising
  30. 30. Mobile click frauds
  31. 31. Mobile advertising works for large-publishers and few games(that go viral)
  32. 32. Pandora case study• In music apps, ads can be incorporated easily without diminishing the user experience.• Pandora’s music app has seen success from ad revenue by delivering personalized ads to mobile users.
  33. 33. Pandora’s assertions• Mobility redefined: Mobile is quickly becoming the dominant radio outlet for consumers.• Mobile makes it easy to act when the device in is in hand and a short radio ad encourages the listener to tap the screen.• From branding to traffic driving and everything in between, mobile does it all.
  34. 34. Mobile advertising working wellfrom awareness to purchase intent
  35. 35. Reach, Demographics, Interactivity,Local impact and Purchase capability
  36. 36. Ads on Pandora app
  37. 37. Ads on Pandora app (cont)
  38. 38. Ads on Pandora app on iPad
  39. 39. In an ideal scenario, user base should love your app so much that they are willing to spend money to purchase the app
  40. 40. Utility Apps – Cosmopolitan
  41. 41. Mobile game developers are the leaders in app development
  42. 42. EA case study – The SIMSThe advertisements offer virtual goods for free Users do not mind interacting with product placements(since they get free virtual goods)
  43. 43. EA case study• Types of in-game advertising options: Traffic Drivers: These ads drive players in the game to visit a brand’s Facebook page, where they can download a free in-game virtual good. In a two-week period, more than one million players from The Sims redeemed the Dove Hair Spa virtual items in their games, and 50 percent of the players chose to “Like” the brand on their own accord.
  44. 44. EA case study• Types of in-game advertising options: Quests: These are the deepest and most involved. Players will have to take a number of steps inside the game to earn a valuable item at the end. For instance, Toyota launched a quest where players earned a Prius.
  45. 45. EA case study• Types of in-game advertising options: Store Tabs: In the virtual goods store, there will be a whole tab dedicated to the brand.
  46. 46. EA case study• Types of in-game advertising options: Media Integrations: Users can watch a short video advertisement or other type of media, to unlock a virtual good.
  47. 47. Brand presence in “The SIMS”
  48. 48. Amazon one click purchase case study• Amazon is giving mobile developers the ability to sell physical items in their mobile apps using a simple one-click process.• The option, available for Kindle and Kindle Fire HD apps, will give developers another way to monetize their apps
  49. 49. Amazon one click purchase case study• Activision is the first publisher to make use of the new in-app purchase option, which will be available in the game Skylanders Cloud Patrol. – Users will be able to buy a physical toy for 99 cents using Amazon’s 1-click transaction system and have it shipped to their address. – They will also be able to get a digital copy of their character that will be playable in the game.
  50. 50. Metaps case study – rewards based advertising• Metaps provides Android developers with the ability to attract customers through low-risk reward-based ads.• They generate revenue from free users through advertisements, increase user activity rates and maximize lifetime user value.
  51. 51. Metaps case study – reward basedadvertising
  52. 52. Commerce through magazine apps –MPA survey case study• 66% of people who read magazines on tablets and e-Readers think they’ll be spending more time with digital issues over the next year• 59% of respondents said that they want to buy directly from adverts• 79% saying that they want to be able to purchase products and services directly from editorial features.
  53. 53. Zappos Now app case study• Zappos Now, a monthly “magalog*” app about style and fashion trends – featuring Zappos products that can be purchased from the app. *Magalog = Magazine + Catalog
  54. 54. The local mobile advertising is the holy grailBut real time highly relevant local advertising is not easy
  55. 55. Locational data processing
  56. 56. Hyper local Targeting
  57. 57. Consumers and Offers
  58. 58. Matching offers with consumers
  59. 59. Profiling, Targeting and Ecosystem
  60. 60. Consumer profiling
  61. 61. Real-time bidding