Mobile User Acquisition Predictions for 2014

by GameHouse

In this weeks App Marketing Conversations Ryan of GameHouse, Robi Ganguly of Apptentive and Ian Sefferman of MobileDevHQ make their predictions for how the mobile user acquisition market will change in 2014. Watch the video or read the transcript below!

Ryan: Good morning and welcome to another addition of marketing conversations. I am Ryan Morel with Gamehouse. As always I’m here with Ian Seth from MobileDevHQ, Robi Ganguly with Apptentive. Last time we connect for the New Year and the holidays. Last week we talked about a little bit of what changed in 2013 around respective businesses and app marketing. And today we are going to talk about some predictions that we have for 2014. Maybe some bold, some not so bold.

So we’ll start today for user acquisition. So the two big… you guys both did that at the same time. Still. So two big things I think is worth talking about as we move into 2014.  One is this overarching push towards quote on quote native advertising. And the second, which we will just call more intelligent buying.

So native advertising at its crux, and I think we talked about it before in ad marketing conversations is the consumption of advertising in the same form in which the content is being consumed. So TV ads are a great example. So far, today, what we’ve seen in native advertising, especially within apps has been ads that pop up that kind of look like the app that is being played.

So that’s not native. But what is native are sponsored posts in Facebook, install ads that kind of look like every other thing on Facebook. Sponsored tweets and Twitter. So Robi we’ll start with you, what do you think is going to change?  How is native advertising going to change user acquisition in 2014?

Robi: Well I mean I think the consent innovation is around how to scale these out. So it looks like Twitter is trying to figure out how to scale it out through MoPub to that channel and if they can actually get it at scale, what it means for marketers and user acquisition is that that becomes not just a place to experiment, but a place where you can drive real budget if they work well. Assuming they work well. Then that’s a really ne interesting opportunity to use a channel that I don’t know that many people are using really well for app in sales today. Like I know people using Facebook, but is Twitter driving much of your spend? I think maybe that shifts.

Ian: Yeah. So I mean less of a prediction and more of just sort of just an open question on my end about native advertising is today part of the goodness of ad networks and things like this. We can make a large spend from a single or two or three sources. You know I could go to AdMob, I could go to Millenial and I can spend on a lot of different apps.

The question becomes if it’s native, is there a way for somebody to come in and basically make native buying easy for the publisher side because ultimately I think it’s one thing when it’s just Facebook and it’s just Twitter who have native advertising and that works well. But if native advertising really does work well in the long term, is there a way to buy on a hundred different apps or a thousand different apps at once, that all gets the native experience and is easy to do and works well. That to me feels like a place where native advertising has both issues and opportunities.

Ryan: Yeah. Go Ahead.

Robi: What is interesting about it is right like what does native mean? It means like in a specific channel it feels like that channel. And so I think means also that creative is really hard to replicate right?

Ian: Exactly. Yeah.

Robi: And we always ran into this at Yahoo. It’s like you had these four units that everybody had creative for, and then you had a whole host that people didn’t have creative for. And that was just graphics right?

Ryan: Yeah.

Robi: We’re not talking about things with texts that are unique to the audience with like an image and then maybe like, maybe it’s long form, I don’t know. It just seems hard to scale.

Ian: Yeah. So then the question becomes if you can’t scale it to a lot of different publishers, is native actually a winner take all market where Facebook and Twitter are just going to own it.

Ryan: Yeah. And it feels like it might be, right? Because there are only so many of these networks that have scale and signal. Facebook clearly has some amount of signal just based on the over all number of data we have. And in some cases you hear about Facebook advertising really working, and in some cases you hear about it not working so well, but there are only so many companies with that kind of eyeball reach, right?

So I think to both of your points and the second thing we want to talk about was maybe the simplification of buying, and on the other side, the simplification of selling your inventory. So right now, there is not a really easy way, unless you’re spending big dollars, to go programmatically buy and maximize your conversion and your spend without having a guy get into it and run through a bunch of Excel spreadsheets, and that’s probably happening on the ad hour side. So what changes do you see coming from that perspective of simplifying how people buy and sell their inventory?

Robi: Well I mean clearly there is consolidation right? So some of the ad networks and companies in that space seem to be pairing, and then they definitely more exchanges in the mobile space which means that it’s becoming easier. I don’t know if the tools are really to the programmatic level. So like when people talk about progress and the web, they’re much more sophisticated than they are for the tools that are existing on the mobile today. So I think that you are getting more access to inventory.

And maybe you got some interesting targeting capabilities, but you’re not really hitting a button with these goals and having extra run. And maybe in 2014 we see twitter execute on that because they have resources that seem to be pretty focused.

Ryan: Okay. Anything to add there?

Ian: Goes right over my head.

Robi: Well okay, we want to talk about this right?

Ian: Yeah.

Robi: So like what do you understand about real time bidding marketplaces?

Ryan: I have a high level of understanding and my impression has always been that everything in adtech is always a little vague. And there is good reasons for that I think, so essentially you get to is some amount of supply coming into the market, i.e. an ad request, and publishers, networks, or whomever, lining up to place bids on that impression based on the various parameters that included in that.

So locations if they have it, any PID if it’s there. Device ID, device type, connection, all this stuff, and all these people line up, much like Ebay and say, “I’ll give you one penny, half penny,” and the impression goes to the person with the highest bid.

Robi: Yeah. Well I think there is lots of phases like real time bidding worth spending. I always think it sounds sort of bullsh** right? Like are you actually paying real time; is somebody there? Like, I’ll take that for two dollars. But it’s like the idea that ad buyers used to in television days make contracts for like a year. And then they have the price set and they couldn’t change that much over the course of that year.

And now you have this opportunity to actually change every millisecond, and so the way that you get there is that you have these algorithms that understand your objective around your campaign. Like I’m optimizing around in sales. I don’t care if I pay two dollars or one dollar; I just want the most in sales.

Ryan: Yeah.

Robi: And then some people are like I have to pay less than a dollar on in sale. And other people are asking about TBMs. And so you take all of those advertisers and their goals, and you bring it into the marketplace, and then the computers are talking constantly about which impression could be the most valuable one across that entire landscape, and that’s in theory real time. The reason it sounds vague is that nobody actually has a system that does that perfectly. It’s like pretty broken in between mediation.

Ian: Yeah.

Robi: It’s confusing. But like I think the fact that you could just push a button and come back a month later and be like yes, I was optimizing at in sales is pretty cool in comparison to what people were doing 12 years ago.

Ryan: Yeah. And I think what we are saying is we are probably not quite there yet.

Robi: No.

Ryan: But we might get there towards the end of 2014.  Maybe.

Robi: I don’t know if like the entire market does, but like the offerings they have at Twitter, Facebook and at Google, seem like they are getting a lot more mature. And then there are a bunch of independent players and people are focusing on it, so it means that it will get better faster I think.

Ryan: Yeah. I think kind of the general first step around this optimization is on the supply side and making it easier for developers. Because the reality here is that the buyers and the sellers know in some cases are the same people in most cases they are totally desperate groups of people. And the sellers are essentially long tail, right? And they need better ways and tools to manage their inventory and to maximize their revenue and inventory.

Robi: Yeah.

Ryan: Which I think is actually one of the biggest arguments against native advertising being kind of the winner take all. Facebook is going to dominate in sales right? Because those developers who don’t make it into the top 100 grossing need that happening right? And they have qualified users because you know that someone playing puzzle game A is likely a good candidate for Candy Crush. Forget about all the other data that Facebook and Twitter might has, that’s a good user probably.

And Candy Crush is going to want to buy them. So yeah, I think the tools, yield management, simplifying the daisy chain, making the waterfall in that daisy chain dynamic based on who is paying, tools like that, will make it easier for the supply side, and there are some of those today. So it might spread.

Robi: Yeah. So when we say yield management, do you know what we are talking about?

Ian: Not a clue.

Robi: Okay.  So the idea of yield management is you have inventory, and you are trying to make as much out of it as possible. So for those of you who are watching who are publishers you have a million impressions today. You can sell all million for like a penny a piece, or you could sell half of a million for $2 per impression, or per thousand impressions.

But how you do that, that’s yield management. So a lot of the time the tools out there are very much saying we don’t have to use all your inventory. But what we get will do this with it, right? And then maybe like if we are really good, we’ll just take the stuff we can monetize and give you back inventory that we can’t do a good job with. So then some other system can actually make money out of it. So…

Ryan: And it actually came from, yield management actually came from the airline industry.

Robi: Seats.

Ryan: Seats. Exactly. So I think there are opportunities. There, especially for developers because they are putting a lot of money on the table.

Robi: Absolutely.

Ryan: So okay. Any other predictions for 2014?  Let’s wrap that up. So predictions for 2014?  Hopefully we start to see more tools for developers to optimize their revenue on the supply side and we start to move towards where there is buying that isn’t manual and is truly rational across the market.

Robi: Yeah sounds right. Okay.

Ryan: All right. Thanks very much for watching. Make sure to check out the segments from Ruby and Ian on 2014 predictions. Like this video, subscribe to our channel and we’ll see you in 2014.

By Ryan Morel

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