So your hands are off the keyboard, your last piece of code is complete and you are ready to release your app to the hungry hordes of avid fans who are eagerly waiting in the wings… except you’re not Steve Jobs and this isn’t Apple.
You’re a mobile developer. Smart, sophisticated, but at the mercy of forces that lie outside of your control.
On one hand, everyone believes they hold a precious jewel, developed over months of hard sweat and elbow grease–the next big Angry Birds.
On the other hand, the keys to the kingdom (of users) lie in the hands of middlemen. Ad providers charge you good money to accomplish the two goals you need in order to succeed: scale and reach. But, it’s not that easy to do that, given today’s current mobile app marketing ecosystem.
The current state of things
Here’s the state of the mobile app marketing ecosystem today. Instead of transparency, you have opacity. Developers and marketers aren’t getting the right, timely information they need to effectively optimize their ad budgets and increase their ROI.
While there are many ad providers out there that provide reporting on user acquisition campaigns, there are also many that do not. Or, they provide manual data dumps on an irregular basis. Even when clean data is available, marketers and developers find it hard to efficiently process, match, store and analyze the information.
The point is that in the end, you still have to ingest a non-standardized set of data from all the various ad providers in the industry if/when you can get your hands on it. Because there are no clearly defined industry-wide standards for the measurement, collection and reporting of data from mobile advertising and cross-promotion networks, most mobile developers have trouble deducing meaningful marketing data from their user acquisition efforts. Ad providers, for their part, face the challenge of disparate, non-standardized data requests and protocols from many advertisers and publishers.
The ad provider model
Here’s the 101 on how ad providers work:
Your participation increases their network size and reach by +1. But you, the app developer, need to rise above your peers to make it onto the leaderboards in order to find out how “sticky” or engaging your app is. In some cases, you can participate in this market as both a buyer and a seller of clicks.
All ad providers allow you to be a buyer of clicks (cost-per-click, cost-per-install are the two most common models), which means you are acquiring users for your app. You are charged to participate in this network in order to get in front of other users on other apps or mobile websites.
Some ad providers also allow you to be a seller of clicks and installs (users). This cross-promotion allows you to charge a bounty for users who come into your app and subsequently click on a banner ad within your app that takes them to another app within the network. This can lower your acquisition costs since you’re monetizing traffic that is leaving your app or mobile website (though it could also lower your engagement if users are leaving prematurely).
The “secret sauce” in the ads game are algorithms and targeting features that enable ad providers and mobile app marketers to find the best relevant users. Some ad networks market their “automated intelligence” while others provide a modicum of control through different targeting options that can be selected.
Regardless of how ad providers market their ability to find the highest quality users, at the end of the day, mobile app marketers want the right data, metrics and insights that allow them to analyze, act and optimize on key performance indicators that speak to how valuable those users are from different sources of traffic.
How do you prosper in the fragmented mobile app marketing space?
In the absence of the right data and metrics to act decisively, mobile developers and marketers face two major pain points today in effectively climbing the app leaderboards and optimizing their user acquisition:
- Visibility into the end-to-end performance of users by marketing channel, from cost to revenue, across all sources of traffic they’re spending marketing budget on to acquire installs (users).
- The ability to compare the relative performance of each marketing channel, by getting the right data and behavioral KPIs quickly and reliably on the performance of each channel, consolidated into one single report or dashboard.
What does it take to effectively optimize your ad spend and justify the higher bids? In order to successfully run a user acquisition strategy today, you need to test and horse-race multiple sources of traffic where you’re acquiring customers. And, you need analytics.
Apps like Angry Birds were successful through sheer audacity and auspiciousness, with a great deal of fun thrown in. From this, a legion of developers with stars in their eyes followed.
But, in this new mobile app 2.0 economy, something is setting the new successful apps apart from the rest: deep mobile user analytics. Zynga pioneered this approach in social and mobile apps. Nimblebit has also proven that having the right data empowers developers to test and optimize for the highest user engagement. Mobile developers are taking heed and leveraging deep user metrics as a cornerstone of their business models.
Data alone is not a panacea for all your creative ills, but data-driven design is like exercise for your creative intuition. It hones and sharpens your instincts, quickly confirms or debunks your strategy and tactics, and saves on the opportunity costs of simply not knowing why things are happening within your app.
The era of full transparency is here
That’s why we’re proud to announce the launch of the Mobile Acquisition Transparency Alliance (MATA).
Working with leading industry partners such as Chartboost, PlayHaven and MdotM, among others, MATA has created an open source API designed to standardize mobile ad reporting. Read more at Inside Mobile Apps, and visit OpenMATA.org to learn more.
MATA’s mission is to empower you–whether you’re an ad provider or app developer or marketer–by working toward a standard that all parties can agree on to communicate with each other. The industry’s prospects for growth and credibility lie in pushing forward with more transparency and accountability. Join us to define the future of our industry.
It’s a bold undertaking, but so is your (ad)venture.
About the author: Aaron Huang has extensive experience in understanding nascent markets, their development and impact on the way people do business. Starting out exploring new markets in China doing portfolio research, he quickly moved into online marketing and built verticals in consumer finance and mobile marketing from zero to millions in revenue in a year. Through his experience in online marketing and Web analytics, he is convinced that disruptive technologies that handle and process petabytes of data for patterns and insights into human behavior represent a paradigm shift in the way the world will do business and make decisions.