The Good, the Bad and the Ugly of Kids Apps Monetization | Eldad Ben Tora
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Delivered at Casual Connect USA 2016. Many app developers find themselves making the choice between practicing monetization methods known from the adult world or leaving in-app monetization outside their business model. A better way awaits, as it often does, in the sensible middle ground. In this session, we bring in some KIDOZ insights to find out: Can developers of kids apps succeed while staying loyal to their original values and their unique audience?
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The Good, the Bad and the Ugly of Kids Apps Monetization | Eldad Ben Tora
- 2. SDK For Apps Content Discovery Network for Kids Kid Mode For Devices TinyLab TuToTOONS Bubadu AppQuiz Casual Connect 2016
- 3. Content Discovery Network for Kids 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 Over 400 Apps Over 15 MM MAK 20 Team Members Casual Connect 2016 2015 2016
- 4. Developing Apps for Kids 75% Want to help kids 25% See a Business opportunity Casual Connect 2016
- 5. Discovery is Extremely Hard, Unless: You have a huge portfolio (to cross-promote) Your apps are featured frequently Casual Connect 2016
- 6. Revenue Per User Is Lower Than Cost ~25 C No economy ~$1.00 Life Time Value Casual Connect 2016
- 7. Marketing Effort & Budget Casual Connect 2016
- 8. Asking Users to Pay (US Market, 2016) #1 Premium / $104M But user base remain small #2 In-App Purchases / $49M But raise complaints, higher regulation, no monetization from most users. #3 Subscription / $37M But requires heavy maintenance Casual Connect 2016
- 9. But What About The Rest? Paying Non Casual Connect 2016 Paying
- 10. Kids Are Shifting From TV To Mobile And Ad spend budget on kids is following $4B Mobile Display & Video$17B TV Ads Casual Connect 2016
- 11. Attitude towards ads in apps for kids No ads Ok with ads OK with Safe Ads only 22% 37% 41% Casual Connect 2016
- 13. Bad: Being Non-COPPA Compliant Corona Platform Casual Connect 2016
- 14. Bad: Being Non Compliant in App Stores iOS Kids’ Parental gate is a must Google Play (Family) No Game Walls Casual Connect 2016
- 15. Ugly: Being Inappropriate Popular coloring app showing inappropriate recommendations for kids Casual Connect 2016
- 16. Good: Being Transparent Nick Jr. clearly marks ads within the feed. Casual Connect 2016
- 17. Good: Being Relevant Promoting care & style games with related games CTR of 18% (double!) Casual Connect 2016
- 18. Good: Respect Kids Non Intrusive User Initiated Native & Content Focused Casual Connect 2016
Editor's Notes
- Good afternoon, my name is Eldad and I’m the CRO and Co-founder of KIDOZ In the next 20 minutes I’ll briefly go over our view of the kids’ space today Focusing on how app developers can make a living from their apps.
- Few words about us to understand our prospective of the kids’ market: We are a content discovery platform for kids - We help kids find good & relevant content We have a kid mode solution we give to device makers and carriers, and an SDK we provide to app developers Our story is in interesting in itself: We started as an app and became a B2B platform as we realized that the bigger problem was not helping kids find content, it was helping content find kids, so we shifted the product towards developers.
- And it worked. Our SDK is used by 500 apps reaching 15 million kids every month, and we are adding millions each month now. We have 20 people based in Israel. This presentation will share the insight we got from working, talking and questioner we did for this lecture.
- And our first question to developers was “why”? What led them to develop apps for kids? Most wanted to make the world better for kids and help them (inspired by their own kids) Only a few developers started as a purely business decision. And, if they did, I’m pretty sure they think differently today.
- The kids’ space has a few main challenges, the first being discovery: Kids are not actively seeking apps on apps stores, they don’t have the patience and skill – Their parents are too busy as well to help, so discovery is super hard unless: You already have big portfolio of 20-30 apps that can boost you new app launch. You have fans in the Google & Apple stores
- And if we thought discovery is hard, monetization is even harder. The cost of acquiring users is way higher than the revenue you make from each one. The gap between the money you need to bring users and the money you make is preventing the space from becoming a sustainable economy This is the biggest problem of our space today And this is exactly what we (and some others are trying to solve )
- The challenges are reflected when developers are marketing their apps Only 21% invest in UA, and their budgets are a few thousands dollars a month – so as a general rule, UA is not a common practice in the space. Most developers focus on store optimization and other free tactics
- So how do apps make money in our space? There are 2 main methods Ads - which will focus on, and asking your users to pay Direct monetization is extremely hard: #1 Premium: up front payment for apps is a popular revenue model, especially on iOS, but NOT having the “try before you buy” concept is keeping most apps with a very small user base, with only well-known brands succeeding in the premium category. #2: In app purchases: kids buy within apps, the default solution mainly for Android. This raises concerns, for example how many parents send their kids to the mall with their credit cards? So without a handy payment method, a kid needs to beg for purchase, which he will do for an app he is extremely engaged with. Not a simple puzzle, he will play with for 10 minutes. #3: Subscriptions: probably the best way to monetize today in terms of ARPU but relevant only if you can maintain the ongoing effort of developing new content for the service. http://www.slideshare.net/dubit/zynga-online-gaming-usa-report-f-inal-slideshare https://www.developereconomics.com/how-much-is-an-active-user-worth
- So while asking for money may work, it leaves behind a huge potential of the NON paying users And definitely does not optimize potential revenues.
- And what is the potential? As kids keep shifting from TV to mobile, the ad spend budget is following and the 17 Billion dollars spend on TV campaigns is slowly moving away from the traditional TV space
- So how do developers feels about ads? Most of them are OK with ads, or are at least looking to run safe ads. I believe that the more we see appropriate ads for kids, the higher the trust level from developers. Developers want to see the process working for them and for kids. rest of the developers will feel better about them.
- So to conclude, let’s run over some good, and bad practices of monetizing kids’ apps.
- One the worst things you can do in the kids’ space is do nothing, or burry your head in the sand and declare you are not targeting kids. When it comes to COPPA, if you are working with any kids, you need to be compliant. You may have heard about InMobi, the ad network that was fined recently for tracking kids’ locations last month. And the FTC is more focused on the developers and publishers. I think we will see more and more networks and platforms saying to developers, if you are monetizing kids’ apps, you cannot use the generic ad networks. And need to select a COPPA compliant solution, which happens to be KIDOZ https://www.youtube.com/watch?v=bJ0u85SIPi0
- You thought being COPPA complaint is hard? Wait until you hear what the stores are asking you to do to be part of their kids’ sections Each store came out with a long set of rules obviously your content and ads need to be safe for kids. And if you think you are in full control, you are wrong. One of our partners enabled Admob, by Google, but was kicked out of Google Play because the AdMob ads were not appropriate For iOS you need a parental gate (which is a killer if the kid is playing by himself and you promote installs) On Google Play you can only promote one item at a time, this is why Tom the cat and Outfit7 are not in the family category
- Last example – what can I say, not exactly educational - and this is not a rare sight. My kid asked me yesterday if I know I could meet women online because he was asked by Smashy Road to watch a Date.com ad.
- For a better taste, let’s finish with some good practices for promoting things to kids First be clear and differentiate between ads and content This is not just for the kids, it is for your brand’s credibility among parents and stores (young kids don’t know how to read, and older kids know its an ad without reading).
- Seek to promote relevant items based on the app theme. When we promote apps around animals within similar apps, or dress up games within baby care apps the CTR was double. You can do it with kids’ oriented platforms like KIDOZ or manually control the promotions you are receiving from the networks.
- And lastly, respect kids with an elegant and non intrusive experience. We created a unit that kids open which allows them to explore more, and only then to see the promotion We found that the ECPM is way higher and kids are coming back to the unit, instead of looking to close it the minute they see it. And I’ll leave you with 1 last minute of self promotion with the touching interview we did with fran, an app for kids.