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Monetization of Apps
     Sandeep Amar
Sandeep Amar on Monetization of Apps at ad:tech Bangalore
MOBILE IS BIG
SMARTPHONES ARE BIG
   APPS ARE BIG
Smartphone sales overtook PC sales
Tablets sales will go past PC sales
Time spent rising fast
Mobile usage for Pandora, twitter over 50%
Mobile internet adoption growing
Smart phone users are potential buyers
Perception about mobile advertising
Actions taken after seeing mobile advertising
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.
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.
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.
Android Vs. iOS


Android is winning in numbers and coming
            close in monetization
Android leads over iOS
iOS still the leader in revenues
India android phones – 0.5 million a
month market




                         No of units sold/month (000)
                                Pp growth (%)
Everyone knows the audience is there,
  and that they are spending a lot of
           time in the apps




            it’s new media
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
Casual users are going to go the
  freemium route and use apps to
entertain themselves for short stints



Which makes mobile advertising and
 in-app purchases very important
Monetization strategies need to be
conceived from the very beginning. It
 has to be the driver of development
         and design process.
A great app(game/content/utility) could ally
  with a mobile advertiser and integrate the
   brand attributes in app logic and design




But the first priority should be best gaming /
     usability / entertainment experience
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
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
Type of ads
• Banner ads
• Inline videos
• Rich media
Sandeep Amar on Monetization of Apps at ad:tech Bangalore
The mobile screen is really small…
Challenges in Mobile ad buying
Mobile CPMs are lower
Mobile advertising still a fraction of
digital advertising
Mobile click frauds
Mobile advertising works for large-
publishers and few games(that go
              viral)
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.
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.
Mobile advertising working well
from awareness to purchase intent
Reach, Demographics, Interactivity,
Local impact and Purchase capability
Ads on Pandora app
Ads on Pandora app (cont)
Ads on Pandora app on iPad
In an ideal scenario, user base should
 love your app so much that they are
 willing to spend money to purchase
                the app
Utility Apps – Cosmopolitan
Mobile game developers are the
 leaders in app development
EA case study – The SIMS

The advertisements offer virtual goods for free



 Users do not mind interacting with product
 placements(since they get free virtual goods)
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.
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.
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.
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.
Brand presence in “The SIMS”
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
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.
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.
Metaps case study – reward based
advertising
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.
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
The local mobile advertising is the
            holy grail




But real time highly relevant local
      advertising is not easy
Locational data processing
Hyper local Targeting
Consumers and Offers
Matching offers with consumers
Profiling, Targeting and
       Ecosystem
Consumer profiling
Real-time bidding

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Sandeep Amar on Monetization of Apps at ad:tech Bangalore

  • 1. Monetization of Apps Sandeep Amar
  • 3. MOBILE IS BIG SMARTPHONES ARE BIG APPS ARE BIG
  • 5. Tablets sales will go past PC sales
  • 7. Mobile usage for Pandora, twitter over 50%
  • 9. Smart phone users are potential buyers
  • 10. Perception about mobile advertising
  • 11. Actions taken after seeing mobile advertising
  • 12. 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.
  • 13. 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.
  • 14. 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.
  • 15. Android Vs. iOS Android is winning in numbers and coming close in monetization
  • 17. iOS still the leader in revenues
  • 18. India android phones – 0.5 million a month market No of units sold/month (000) Pp growth (%)
  • 19. Everyone knows the audience is there, and that they are spending a lot of time in the apps it’s new media
  • 20. 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
  • 21. Casual users are going to go the freemium route and use apps to entertain themselves for short stints Which makes mobile advertising and in-app purchases very important
  • 22. Monetization strategies need to be conceived from the very beginning. It has to be the driver of development and design process.
  • 23. A great app(game/content/utility) could ally with a mobile advertiser and integrate the brand attributes in app logic and design But the first priority should be best gaming / usability / entertainment experience
  • 24. 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
  • 25. 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
  • 26. Type of ads • Banner ads • Inline videos • Rich media
  • 28. The mobile screen is really small…
  • 29. Challenges in Mobile ad buying
  • 31. Mobile advertising still a fraction of digital advertising
  • 33. Mobile advertising works for large- publishers and few games(that go viral)
  • 34. 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.
  • 35. 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.
  • 36. Mobile advertising working well from awareness to purchase intent
  • 37. Reach, Demographics, Interactivity, Local impact and Purchase capability
  • 39. Ads on Pandora app (cont)
  • 40. Ads on Pandora app on iPad
  • 41. In an ideal scenario, user base should love your app so much that they are willing to spend money to purchase the app
  • 42. Utility Apps – Cosmopolitan
  • 43. Mobile game developers are the leaders in app development
  • 44. EA case study – The SIMS The advertisements offer virtual goods for free Users do not mind interacting with product placements(since they get free virtual goods)
  • 45. 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.
  • 46. 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.
  • 47. 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.
  • 48. 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.
  • 49. Brand presence in “The SIMS”
  • 50. 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
  • 51. 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.
  • 52. 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.
  • 53. Metaps case study – reward based advertising
  • 54. 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.
  • 55. 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
  • 56. The local mobile advertising is the holy grail But real time highly relevant local advertising is not easy
  • 60. Matching offers with consumers