Eric Seufert - State of the App Economy: 3 Opportunities and 3 Challenges

State of the App Economy:3 Opportunities and

3 ChallengesEric Benjamin Seufert

Online Marketing RockstarsMarch 3rd, 2017

Who I am

Heracles Mobile Dev Memo Freemium Economics

Who I am

Presentation Structure

Presentation Structure1) Current State of the App

Economy;


Economy;2) 3 Challenges & Opportunities

in 2017.


Economy;2) 3 Challenges & Opportunities

in 2017.

Current State of the App Economy

• Tech giants own considerable mobile audience and that audience is growing;


Source: Nielsen


- 8 / 10 of the most used apps (in terms of unique audience) owned by Facebook & Google;

- “Legacy” apps like Facebook, YouTube, Gmail still growing at >10% YoY.

Source: Nielsen


- Many of these apps are ad channels and / or third-party content distribution channels.

*******

Source: Nielsen


Google Maps is an ad channel and / or third-party content distribution channel?




• Tech giants are turning their apps into content consumption platforms;





• Tech giants are turning their apps into content consumption platforms;

• Increased consumer engagement / spending on mobile continues to drive advertising budgets.


Source: SensorTower


Source: SensorTower / Unity*Applies specifically to mobile gaming


Source: Flurry


Source: eMarketer


Source: eMarketer

Source: Zenith


Source: eMarketer


Source: eMarketer


Facebook is at the center of much of this growth, pushing new innovations in video and other mobile placements;


Source: Facebook Q4 2016 10-Q


Source: Facebook Q4 2016 10-Q



Economy;2) 3 Challenges &

Opportunities in 2017.

Challenge / Opportunity: Making sense of proliferation of

new platforms for user engagement / content

consumption.

When every device is connected, every device appears to be a platform on which to develop & reach a new audience:

3 Challenges & Opportunities in 2017

When every device is connected, every device appears to be a platform on which to develop & reach a new audience:


• Tech media sometimes uncritically promotes all emerging platforms as ascendant “next big thing”;





• New platforms are appealing (first mover advantage, lack of price discovery, etc.) but developers need to be able to discern hype & time deployment correctly.


• Example: VR vs. Mobile Gaming

Source: SensorTower / Unity


OPPORTUNITY: Opportunities to reach new audience emerge constantly as connected devices proliferate and create platforms;

CHALLENGE: Difficult to know which platforms will truly reach scale, and being early same as being wrong.


Challenge / Opportunity: As mobile video advertising surges, attribution and ROI

calculation becomes problematic.


• Many developers rely on patchwork marketing infrastructure comprised of many 3rd party tools:

Data Warehouse (S3, etc.)

Data Visualization Tool (Tableau, etc.)

Attribution Platform

Ad Network Cost Aggregation Platform

Ad Networks

N1

N2

N3PMD






Ad Networks

N1

N2

N3PMD

Marketing Team3 Challenges & Opportunities in 2017





Ad Networks

N1

N2

N3PMD

Marketing Team3 Challenges & Opportunities in 2017


• Shifting to video complicates this further because clicks / installs aren’t attributable;



• Formats such as Facebook Live / Influencer Campaigns can be totally contextual;



• Formats such as Facebook Live / Influencer Campaigns can be totally contextual;

• Probabilistic models help advertisers match clicks / installs to campaigns.

OPPORTUNITY: Continued popularity of video on mobile creates endless new opportunities for audiences to be reached (sometimes cheaply);

CHALLENGE: Fuzzy attribution makes it difficult for advertisers to understand ROI.


Challenge / Opportunity: Growth of Walled Garden

advertising platforms.


• The biggest mobile advertising platforms are becoming siloed, both in terms of tool offerings and inventory offerings;

Existing / Old Paradigm:

Inventory Pool

Mobile Gaming Advertisers

Mobile Commerce Advertisers

Dating App Advertisers

Mobile Gaming Publishers

Dating App Publishers

Mobile Commerce Publishers

Ad Networks / Native Inventory Sources


Emerging Paradigm:

Mobile Gaming Advertisers

Mobile Gaming Publishers

Dating App Advertisers

Dating App Publishers

Mobile Commerce Advertisers

Mobile Commerce Publishers

& travel, etc.

Brand Advertisers

& travel, etc.

Retail Advertisers



• The biggest mobile advertising platforms are becoming siloed, both in terms of tool offerings and inventory offerings;

• Owned inventory platforms have created vertical-specific inventory pools;

Ad Networks / Exchanges

Owned Inventory

● Retail;● Brand;● Mobile

commerce;● High-LTV /

High-CTR Games.

● Intent-based advertising (travel, in-store retail).

● Brand;● Youth-oriented

retail;● Entertainment.

● Games;● Finance


• NOTE: This segmentation is soft. Every type of app is & will continue to be advertised everywhere;


OPPORTUNITY: Platform-specific tools and inventory help advertisers reach appropriate audiences more efficiently;

CHALLENGE: Walled gardens create scaling difficulty for advertisers. Analytics / infrastructure “lock in” can limit growth.


http://hrcls.co

[email protected]@eric_seufert

Thank You!

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Eric Seufert - State of the App Economy: 3 Opportunities and 3 Challenges