3Q & KCDMA The State of the State for 2015 and Beyond

3Q Digital

What are we talking about today?

• Market Overview • The growth of mobile

advertising• mCommerce: how do we really

buy on our phones? • Mobile Web vs. Native App:

what does it mean for shopping?

• How to optimize mobile for holidays – Q&A

3Q Digital

Hi!

3Q Digital

Just like pants, we all put our phones on in the same way…

Source: http://www.jeffbullas.com/wp-content/uploads/2015/02/mobile-marketing-trends-1.jpg

3Q Digital

The Rise of Mobile:

3Q Digital

The Rise of Mobile:

YoY January investment by device – lead generation-focused client

3Q Digital

The Rise of Mobile:2014 – large top-line conversion growth driven by mobile

Mobile now accounts for 29% of eCommerce in the US and 34% of global transactions. It is expected to rise to 33% and 40% respectively by EO 2015.*Source: http://www.criteo.com/resources/mobile-commerce-q1-2015/#sthash.tI6VgZlw.dpuf

3Q Digital

The Players Have Changed

• Twitter – 80% of Twitter’s 284 million monthly users access via their mobile device

• Pinterest – 75% traffic comes from mobile. Introduced app Pins accessible via iPhone or iPad

• Tumblr – 65% of user base accesses content on a mobile de vice

300 BILLION apps have

been downloaded

since the launch of the App Stores

3Q Digital

What are our expectations of our phones & tablets?

Utility Productivity Entertainment

3Q Digital

Trends for 2015

Engagement & Personalization will rule

Mobile ad revenue and demand will only increase; the arms race is on, and there will be only a few winners and many, many losers

Consolidation. Hey, it’s still complicated

We must stop asking, Is this the year of mobile?

Instead, we need to look deep and say, how badly will my brand suffer this year because we aren’t mobile?

3Q Digital

The Mobile Ad Landscape: Well, this looks simple, right?

3Q Digital

Amid this mess, where do you find your mobile customers?

3Q Digital

Android Overtakes iOS But remember that iOS is going to be where your commerce bread is buttered!

Source: Opera Media Works Q1 2015 Report

3Q Digital

What are consumers doing on their phones while second screening? You’d be surprised…

Source: http://www.nielsen.com/us/en/insights/news/2014/living-social-how-second-screens-are-helping-tv-make-fans.html

3Q Digital

It’s almost 2016. What isn’t Mobility disrupting?

• Native Apps are starting to dominate Automotive – Just check out Edmund’s app

• B2B Mobile is no longer an afterthought, it’s essential

• Retailers embrace showrooming & the sky isn’t falling; It’s ‘webrooming,’ the mobile

assisted shopper

• Drugstores provide much needed utility to customers through their phones

• IoT: Our toys are beginning to provide function and now we need to earn trust on a

38MM screen

• QSR, Food & Beverage transform mobile loyalty into loyalty-and-customization-

everywhere

• Google, Facebook, Twitter & Pinterest are all rolling out ‘Buy Now” buttons

• Retailers acknowledge that mobile and omnichannel are now table stakes – what are

their innovation strategies to always stay one step ahead of the curve?

• CRM, Personalization, Measurement & Analytics become the back bone of any

true mobile experimentation

3Q Digital

The Big Question: We’ve got news for you, it ain’t just Mobile Over the past

four years, usage on all device types has grown,

desktop included. So mobile has

not grown not at the

expense of desktop, but

rather in addition to

it.

- Kristine Schachinger

Source: http://searchengineland.com/mobile-search-need-perspective-222386

3Q Digital

The Big Question

Pre-2014 Post-2015

Should I do mobile?

Are my customers really there?

What’s my WAP site?

What banners should I buy?

What is my mobile revenue strategy?

My customers are using my competitors

App, mWeb, Desktop + Something special

DSP, DMP, CPI, Networks, Native, Cost-per-engagement

3Q Digital

Let’s talk about apps…Mobile App Install Revenue is Roughly 30% of the Entire Mobile Ad Market

Source: Business Insider Intelligence: The Mobile App-Install Ad Report 1.26.15

3Q Digital

When it comes to app installs and mobile ad revenue, who are the biggest and best players?

Then, there’s EVERYONE ELSE!

3Q Digital

But the challenges remain the same:

• Discovery – Creative Messaging & Audience

Targeting• Crowded Ecosystem – Differentiation• Retention – 66% of app users open an

app between 1-10 times only• Measurement – 67% start shopping on 1

device and continue on another• ROAS and cost

Source: Number of apps as of June and July for Apple and Android, respectively; Nanigans’ client results as of October 2012;Facebook internal data for Q2’2013 and App Annie top grossing apps list end of Q2’13; Localytics, July 2013.

3Q Digital

How are brands buying app installs?

• CPI• CPD• CPC• CPM• CPP• CPL

We lean on these methods, but we lean forward into a CPQE model (cost-per-qualified-engagement)

3Q Digital

And how much do they cost? (Hint: it’s only going up) Mobile App User Acquisition Costs

Because install ads perform well and have a clear ROI, they are popular among marketers, and the demand means they are more expensive than other formats.*

(Source: Business Insider Intelligence: The Mobile App-Install Ad Report 1.26.15Fiksu Coster Per Install Index)

3Q Digital

Source: Liftoff Mobile App Engagement Index Q4 2014

It’s not about just acquiring users. What is unique enough to make them loyalists?Read: What is so compelling that a user will open your app more than once?

3Q Digital

• Companies spent an average of $9.45 to acquire a registered user from mobile app install ads • CPAs for non-transactional post-install events, including registering and sharing, decreased in December, while CPAs for transactional events (making a reservation, purchasing, and subscribing) increased• The cost to acquire a registered user on iOS was 23.4% more expensive than on Android

Liftoff Mobile App Engagement Index Q4 2014: Social, Commerce, Finance & Travel

Source: Liftoff Mobile App Engagement Index Q4 2014

3Q Digital

The difference between iOS & Android

3Q Digital

eCommerce Example

Analysis:

• The install-to-registration rate for new users of eCommerce apps was 70.6%, and the install-to-first-purchase rate was 2.3%

• The median cost to acquire a first-time purchaser from app install ads was $167.13, with a range of $30 to $400

• In eCommerce apps, we see a significant drop-off from registration to first purchase. This is likely due to friction around paying on mobile

Source: Liftoff Mobile App Engagement Index Q4 2014

3Q Digital

The Hard Truth About YOUR App

70% of apps fail

Assume that your app will fail and work like hell to avoid it

Optimization is key – “In the world of mobile applications, there are no user manuals, and the consumer is expected to know how to use an app the second they download it.”*

Paid Acquisition is not BS, but you must get it right to make it truly work for your brand

(Source: Mobilemarketer.com)

3Q Digital

Of Course, It Means Nothing If You Don’t Measure!

3Q Digital

For marketers responsible for building a profitable mobile user base, there are several things you can do to align your paid media mobile to your revenue goals:

– Map out the key conversion events inside your app/site that align with your revenue goals

– Track conversions by campaign including ad creative, placement, and user demographics

– Profile users who successfully complete high-value post-install events, and use this data to perform lookalike targeting in future app-install campaigns

– Use real-time bidding and programmatic buying to target ads on a per-user basis and maximize your marketing spend

Planning: Best Practices

3Q Digital

3Q’s Mobile Approach – Get It Right From the Start • What is the GOAL of your mobile business?

Establish this early, and always be agile and iterative. Your goals will change!

• #1 thing you can do to have a successful app is to MAKE IT GOOD! Sucky apps, well, they SUCK!

• Competitive analysis – what are your competitors doing right and wrong? You do not need to reinvent the wheel

• Get enough users to monetize (again, goes back to goals)

• Make sure that they’re the RIGHT kind of users to monetize well!

3Q Digital

Concluding Thoughts

• Lots of factors to consider• Mix of paid, owned and earned • Fully embrace owned and earned as you begin paid • Consider launching around new phone/OS updates• You must be bi-OS, but concentrate on where your

users are • Creative, placement, app store ranking,

optimization – these all matter. Do not underestimate

• Don’t chase good money after bad; don’t spend a lot of money buying bad users– Spend good money at an optimal price buying

qualified and engaged, lucrative users