Why the internet giant acquired a mobile tracking company.

1. The Reason Behind Yahoo’s Purchase of
Flurry
Background to App Discovery
Global mobile ad-spendispredictedtoincrease 75% to $31.45bn as users are now spendingover
50% of theirdigital time onmobile apps. Thisnotonly showsthe importance developersare placing
on app marketingbutalsothe difficultyof doingso.Witha brokenappstore resultinginthe top6
techbrands (Facebook,Google,Apple,Yahoo,Amazon,Ebay) owningnine of the tenmostused
apps,occupyingover75% of user’stime,thisleaveslittleroomforup-and-comingappdevelopers&
large traditional brands.
Lack of Cookie Support & 3rd
Party Audience Data
Additional problemssuchasa lackof cookie supportandthirdparty audience dataonmobile have
resultedinburgeoning acquisitioncosts.AsCPM’shave startedtorise,conversionratesare still
laggingbehind. Itlooksonthe surface like alotof acquisitionisblind,apray& sprayapproach to
findingthe rightusers,withlittle hope of makinga positive ROI.
UserProfiling
All isnot lostthough,forseveral yearscompaniessuchasFacebook&Flurryhave beenbusy
collectingaudience data,buildingupdetailed3rd
partyuserprofiles: seeingwhatappspeople use,
howtheyuse them,and whothey’re friendswith. ThisdatahasenabledFacebooktocharge $0.50
CPC andstill produce the lowestCPIsinthe industry. Twitterisalsogoingdownthe same route,
usingreal-time sentimentbasedonkeywords.
Yahoo PurchasesFlurry
Yahoo hasfor yearsbeen seenasa dyingbehemoth,butsuddenlyspurredintoactionbya
recalcitrantMarissaMeyer determinedtobringYahooback to life,orat leastbuyYahoo’swayto
success,haspurchasedFlurry,a pure-playmobile appanalyticsprovider.
The sale cost hundredsof millionsof dollars,andeventhoughbyall accountsFlurrywasloss-making
and debt-ridden,andlackingscale comparedtorivals, itsaudience datapropositionwasseenasa
goldengoose byYahoo,badlylookingtobolsteritsmobileproposition.
Flurry’sdatahas the potential tobe a game changer.Its Trojan horse product(Flurryanalytics)
servesavast array of app developersinreturnforbeingable toutilisetheiraudience data&profile
theirusers.Thiscan make the differencebetweenYahoo sellinginventoryat$2 CPMvs an enriched
datasetproducingresultscosting$20 CPM.
Whilstthiswill notbe sufficientforYahootocatch Google & Facebookonmobile,itisanimportant
stepinthe rightdirection,andalsothe reasonwhyYahoovaluedFlurryat hundredsof millionsas
opposedtotensof millions.

2. The Value of Audience Data
To put thingsintoperspective,acampaignwithoutaudience datawill probablyachieve a1-2% click
to downloadrate,anda large drop-off post-downloaddue touninterestedusers.Butif youknew
exactlywhoyouwere targeting,the appstheyhave ontheirphone,andhow oftentheyuse them,
thenyoucouldpotentiallydouble notjustyourconversionrate butalsoin-appengagementrate,
ultimatelyleadingtogreaterrevenue. Whilst,MobAd’stestsof Flurryhave notyieldedsuchpositive
resultsyet,whichbeliesstill howearlyonthe propositionis,itislikelywhencombinedwithYahoo’s
back-enddatato reallyhave the potential tooutperformrival exchangessuchasMopub andNexage
still reliantonDSPsactingwithoutdetailedaudience insight,andpotentiallyleadtoa greatershare
of publishersmovingto Flurry/Yahooto monetise their inventory.
In anyevent,thisisa highlysignificantmove forYahooandprovides anotheruseful stepintothe
pure-playmobile world,whichitseekstogrow into,toensure notjust itsfuture revenues,but
possiblyalsoitslong-termexistence.
http://www.emarketer.com/Article/Driven-by-Facebook-Google-Mobile-Ad-
Market-Soars-10537-2013/1010690#sthash.nRo9JdTI.dpuf