Monthly Archives: November 2014

App monetization

By | Adlytica Platform, App Guides, Uncategorized | No Comments

f you’re sitting on a mobile app with a healthy user base, you might be stuck at the “how do I monetize my mobile app” phase, or scouring the Web for ways to increase mobile app revenue. Lone and behold, there are dozens upon dozens of monetization strategies that mobile app developers can choose from – many of which you might not have thought of outside of in-app purchases, in-app advertising, and paid apps.

To help you with your strategy, we’ve listed the 40 different ways that mobile app developers can monetize their Android or iOS apps..

Paid Apps

1. Paid apps Selling an app for upfront cash in an app store like Google Play or Apple’s App Store crosses all developers’ minds at the beginning of the app monetization life cycle. The benefits of selling an app in an app store is the up-front cash you’d be receiving per download, minus the 30% app store fee. But there’s one problem. Paid apps, even at just $0.99, is a mental barrier that’s fueling the decline of paid apps. In its place is the growing popularity of the freemium model. In fact 90% of apps in the app stores in 2013 are freemium apps, an increase from 84% of free apps in 2013.

2. $0.99 app  However if you’re convinced that the paid app route is your poison, there are a couple of extra strategies you can employ. The first option is selling a mobile app for a cheap price of just $0.99. Generating satisfactory revenue even for a one dollar app is an uphill battle since you’ll need a high volume of downloads.

3. Niche, premium paid apps – If your app has a proprietary algorithm to help detect medical illnesses, or claims to help law students pass the bar exam, niche apps such as these might be worth selling at a premium.

4. Alternative app stores – Google Play and Apple’s App Stores aren’t the only mobile app stores available to developers. These alternative Android app stores, and alternative Chinese app stores, are additional channels that might help you net more downloads.

In-App Purchases

5. In-app purchases  Offering users in-app content that can be purchased opens up an extra avenue for generating revenue. Typically, these purchases can be separated into different types of in-app purchases that include the following:

6. In-app upgrades – App users can offer a paid character or environment upgrade to unlock new levels and next-generation content in a mobile game.

7. In-app consumables  App users addicted to a mobile app – especially mobile games – can spend thousands of dollars on consumable items. In-app consumables may include new or improved characters that mobile gamers can purchase, additional features in a productivity app, or single use virtual goods that temporary enhance your in-game abilities.

8. In-app currency  Along the lines of an in-app consumable, you might offer in-game currency that can be purchased in bulk quantities. These can be used toward extra playing time, or for the purchase of rare virtual goods.

Partnerships

9. Mobile partnerships – Securing partnerships, whether for the purpose of producing paid and branded content or simply to have your app sponsored by a major brand advertiser is an auxiliary monetization channel that major app developers will employ. However, mobile partnerships with major sponsors will typically only come about if your app has both quality and a large quantity of traffic.,

10. Create co-branded games or apps  Often times if you’ve developed a successful game, brands will not only come to you, but will also entrust your expertise and resources with developing a re-skin of your app that leverages and promotes the brand. For instance Angry Birds launched its Star Wars version, while Temple Run was re-skinned for Temple Run Oz to celebrate the debut of “Oz the Great and Powerful.”

11. Sponsored content – Content sponsored by brands, including in-app virtual goods, or “limited-time only” characters is an effective way to generate an additional source of revenue that plays off the brand’s recognition without expending too much of your resources. Temple Run 2 did a great job by offering Usain Bolt as a branded in-app purchase.

Subscriptions

12. Subscriptions  Ideally, you can convert new users into lifetime paying users. Most paying users will make an in-app purchase or two and never return, while the users that the app industry calls “whales” will spend thousands or even tens of thousands to advance their in-app or in-game objectives. To monetize those paying users who aren’t necessarily the biggest of spenders, selling monthly subscriptions for additional timely content is may be a strategy for monetizing the “fish.”

Display Advertising

13. In-app mobile advertising  Promoting an ad within your mobile app, is by far the easiest and fastest monetization strategy that just about every mobile app developer (gaming in particular) employs. You can select an ad network, download their SDK, deploy a mobile ad of your choice from the ad formats provided, and monetize the traffic you deliver to advertisers. Fortunately, with the maturation of mobile ad networks, there are plenty of ad formats to choose from.

14. Interstitials  An interstitial ad format might not have the highest eCPMs and CTRs, but it’s by far the most profitable compared to other formats. This ad format fills up an app’s screen at strategic times – before you exit an app or after a “Game Over screen” for example – and tends to generate high impressions.

15. Banners  We’d be hard pressed to find anyone who isn’t familiar with a banner ad. And the format’s reputation comes off as spammy. The one advantage the format has is that it’s quick to deploy, however unlike interstitials, banners tend to generate the lowest revenue compared to other ad formats.

16. App walls  With multiple apps advertised in an app wall, CTRs and eCPMs tend to be higher with panel and list ad formats (both app walls) than other types of display ad formats like interstitials and banners. However the number of impressions that app walls generate pale in comparison, so revenue may not necessarily catch up to interstitial earnings.

17. Video ads – With Facebook and Twitter jockeying to implement and launch video pre-roll ads, the companies have started a frenzy over TV ad spend dollars. Because video ads are generally a strategy employed by brand advertisers, and video ads tend to run on CPM campaigns, video ads attract the highest eCPMs and the biggest ad spend.

18. Rich media ads  Rich media ads attract a high level of engagement. With the customizability of rich media to mix and match interactive elements like an in-ad game or even embedded music and video, advertisers can not only generate higher ROI but also collect invaluable feedback and user behavioral data that can be used to optimize your ad campaign to better monetize your users. For instance, an advertiser might gauge user sentiment of two or more different types of app avatars by asking viewers of the mobile ad to click on their favorite.

19. Geo-targeted advertising Not quite living up to the hype of geo-targeted advertising just yet, wearable devices will usher in a new wave of advertising that will redefine “targeted” ads. But until wearable tech reaches maturity, providing geo-targeted ads on mobile to your users is one way to increase mobile advertising conversions by serving timely ads.

20. Optimize existing mobile ads – As tedious as “optimization” sounds, optimizing your mobile ad formats and monetization strategy is an essential approach to improving your earnings. These techniques may include boosting eCPMs, or even troubleshooting eCPMs. Of course seeing as how eCPM isn’t the end-all metric, other ways to optimize earnings may include A/B testing multiple ad formats, and even switching off the poorly performing advertisers.

21. Cross-promotion network – Cross-promotion might not be the most talked about subject in mobile advertising, but mutual in-app ads will help you make more money simply by saving ad spend. You might not be actively generating mobile ad revenue with this strategy, because you’re not collecting the bid cost per install, however you’re acquiring users for free. Besides, you can always monetize the users with in-app purchases. If you don’t have an advertising budget, and willing to forgo revenue for the sake of acquiring users, you’ll want to check out AppFlood’s Exchanger program.

22. Incentivized installs – Apple might have banned incentivized installs, but if you’re an Android developer, offering game currency or virtual goods in exchange for an install is a monetization model that ad networks like Tapjoy and its customers have profited from. At the other end of the spectrum from the advertisers’ perspective, incentivized installs tend to attract low quality users.

App Promotion

23. Promote your app While app promotion isn’t exactly a direct strategy for monetizing an app, it’s necessary to attract more users and guide more potential customers down the monetization funnel. There are plenty of different ways to promote your app, and we’ll cover a few more traditional, but effective strategies.

24. Email lists – Email lists are marketing gold, and tends to convert readers into users far more effectively than other online promotional channels like social media. In fact email is a great way to get users onto your app in conjunction with promotions or deals on “limited time only” virtual goods, especially if you’re promoting a top-performing advertiser.

25. Social media – A few mobile games like Candy Crush Saga have ridden the social wave thanks to Facebook. Studios have capitalized on the social format to accrue hundreds of millions of dollars. While few developers have managed to reach a profitability a that’s on par with Candy Crush using social media, in an ever-increasingly virtually connected world it’s almost expected that an app will include social game mechanics if not Facebook Connect.

26. Guerrilla marketing – With online and social media marketing, you might often forget that sometimes promoting a good or service can get quite civilian. It might take a freebie, on-the-ground event, or other means to attract new users (namely passerby on the streets) and get them to download your app. Just make sure that the cost of acquisition in a guerrilla marketing campaign fits your budget, and you might want to target major tech events where there are a high volume of eager early adopters. We’d suggest that you check out South by Southwest for inspiration.

27. Get your app press coverage – Whether you’re Google or an indie app developer, your app needs press to survive. And press coverage in many cases can provide a high ROI, granted that you’re investing in a stellar PR team or manage and execute the press outreach yourself. As for whether bad press is good press… well you can come to your own conclusion.

App Development

28. App localization – A great way to monetize your mobile app is to extend your app’s reach abroad and monetize international traffic – including emerging regions, which is actually worth more than you might give it credit for. But to monetize this international traffic, you’ll need to break out into international markets by localizing your app. This might mean offering region-specific content that regional users can purchase, or simply adding additional language support for your app.

29. Funneling freemium users to a paid app – Who doesn’t like “free?” Freemium apps outnumber paid apps in the app store, but if for some reason a paid version is the only way that you’re going to make money from you mobile app, why not offer a teaser for free? The free app is bound to outperform paid, looking at downloads alone, and this strategy just might do the trick in converting users from the free demo to your paid version.

30. Web apps – With search traffic on mobile skyrocketing, it’s smart to develop a Web app (or Website) for the purpose of getting indexed by Google’s search engine and snagging a piece of the growing organic search traffic to drive in new users. This might mean creating a mobile-optimized version of your website or a HTML5 version of your iPhone or Android app. And to funnel Web users to your mobile app, you can always add a pop-up or landing page that encourages Web users to download the official app.

31. Develop auxiliary apps – Developing new auxiliary apps that funnel new users or jump on new trends – similar to what Twitter attempted with Twitter Music or Facebook strategized with its in-house development of Poke – isn’t a strategy geared toward smaller developers with limited resources. Larger developers can create auxiliary apps to capture new users (who might have different interests than those that use your existing app) and cross-promote between apps to increase your user base and engagement with your product suite.

Sales and Merchandising

32. E-commerce – E-commerce (or m-commerce as it’s called on mobile) might not be the first mobile monetization strategy that pops into your head, especially amid this mobile ad-centric app and in-app purchase economy. However there are plenty of apps like Gyft that have managed to build a business around the sale of tangible goods (and digital coupons) on mobile. If m-commerce fits your business model, you can start with m-commerce API providers like Tap2print, which delivers prints of images, or ElasticPath, a mobile commerce solution.

33. Affiliate sales – If direct m-commerce isn’t your cup of tea, you can let the tried and true experts in selling goods online do the heavy lifting in sourcing and shipping goods. Instead, by participating in an affiliate program, you can sell products by adding links to the products’ purchasing pages. In exchange you’d receive a percentage of each sale that’s made through your app. Amazon for instance extended its Amazon Associates affiliate program to mobile app developers.

34. Merchandising – Granted that your app has reached the mobile gaming heights that Rovio’s Angry Bird or PopCap’s Plants vs. Zombies enjoy, your app is likely a franchise by this point and selling your app’s IP in the form of soda cans or plush toys is an extension of your revenue model to pad your company’s bottom line.

35. Donations – For most developers, asking for donations isn’t the most ideal strategy for earning income from your app. Then again Jimmy Wales does it, not to mention that crowdsourcing is “in” right now. So if you’re inclined to believe that you have an app that benefits society, why shouldn’t you get compensated? At the least you’ll want to recoup the sweat equity that you’ve put into developing the app.

Selling App Data or Source Code

36. APIs If your app offers a value proposition that’s got your peers’ attention, not to mention press-worthy, you’ve probably been approached about the availability of your API once, twice, or more times. While it’s a great idea to make your API free-to-use and integrate, there’s a business opportunity in making the meat of your API available to developers for a price.

37. Selling your data to analytic companies This tech-centric world revolves around the flow of information, and in many instances information holds considerable value. Take Facebook, Google, and Amazon for instance. These companies can tell you where you’ve been, what your interests are, and what your purchasing habits look like. Behavioral data like this is a gold mine for marketers. So if you happen to have a popular app, there’s a good chance that you can extract value-worthy insights about your users that a marketer is willing to pay for. One warning to keep in mind is to be mindful your user’s privacy. Lately there’s an understandable apprehension toward using apps that monetize user data.

38. Sell your app off – If you’re planning on moving onto bigger and better apps and maintaining your existing app or game is no longer in your best interest, selling your app’s IP and code is a quick solution for upfront cash. Apptopia for instance is a marketplace that facilitates the buying and selling of mobile apps.

39. “White label” your app’s code If you’re concerned about generating quick revenue and prefer not to have to go through the process of acquiring and monetizing your users, you can always sell your app’s source code. In this example you wouldn’t be selling off your IP, however you’d be putting multiple versions of your source code with slight tweaks onto in a marketplace like Chupamobile, where other developers can purchase the code and re-skin the app to their liking. This way you can earn money, while the buyers wouldn’t have code the mobile app from scratch.

Mix and match

40. Mix and match any one of these strategies  If you’ve managed to read to the end of this list, you’re certainly seeking ways to monetize your iOS or Android app. There’s no one strategy-fits-all solution to deciding on the perfect monetization strategy for you. In fact, the best-fit may require A/B testing or even mixing and matching multiple strategies outlined above. Whatever the case may be, there’s really no excuse for not being able to make money from your app, as we’ve outlined as many as 40 strategies for making money with your mobile app.

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We Now Spend More Time On Mobile Devices Than TV

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Apps are driving the increase in time spent on mobile devices.

Users spent more time on mobile devices than watching TV for the first time last quarter. That’s according to new insights from Flurry, the mobile ad network now owned by Yahoo.

Time spent on mobile devices the U.S. increased 9.3 percent in the past 9 months from 2 hours and 42 minutes to 2 hours and 57 minutes, while TV usage remained flat at 2 hours and 48 minutes.

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Mobile usage was app driven, as time spent on the mobile web remained flat.

The growth came not from the top 25 apps (as ranked by comScore), but from apps that aren’t necessarily blockbusters.

Flurry found that time spent in the top 25 apps grew by 1 percent in the past 9 months, while the remaining apps saw usage time increase by 21 percent.

Rather than seeing consolidation taking over the app ecosystem, Flurry says “independent developers have survived attempts by large players to consolidate the ecosystem” and are flourishing. There are now some 590,000 applications on the Flurry network in 180 countries, the company says.

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Enhanced Ecommerce For Google Analytics Rolls Out Of Beta

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Also announced, a new Shopping Campaigns report to analyze AdWords performance in Analytics.

Google’s overhaul of ecommerce features in Google Analytics is now officially out of beta.

Launched in May to provide merchants with a more complete view of how visitors navigate through the purchasing funnel, “Enhanced Ecommerce” is being released today with more tools. Also new for e-commerce advertisers, Google is rolling out a new Shopping Campaigns report in the AdWords section of Google Analytics.

With these new features, Google says Analytics is now “a complete solution for ecommerce businesses” as retailers approach the holiday rush. Enhanced e-commerce runs on Universal Analytics and relies on retailers tagging their sites with the ec.js plugin.

The new reporting is meant to help merchants focus, not just on what is selling, but on where and why other visitors aren’t converting. It can also track and report refunds. Google states:

Importantly, Enhanced Ecommerce gives you the ability to identify segments of customers who are falling out of the shopping funnel. You can then focus on these high intent-­to­-purchase customers with remarketing or by optimizing your checkout flow.

Product Lists And Product Attribution

Product Lists are “logical groupings” of products on a retailer’s site, based on the tagging. Product Lists can report on catalog and search results pages, related products and cross-sell and up-sell blocks of products. Merchants can then see which list users saw, the products that displayed in those lists and the performance metrics — clicks, views, click-through-rate — for each list, list position and product.

The Product List Performance report lets retailers identify how customers find and interact with products before purchasing them. The report includes Product Attribution data such as a “last action” attribute. That attribute gives credit to the last Product List that the user interacted with before converting. Merchants can use the Product Attribution functionality to understand which Product Lists drive conversions.

Mobile App Analytics

The Google Analytics SDK supports Enhanced Ecommerce, so retailers with mobile apps can analyze product performance and customer behavior across mobile and web.

Shopping Campaigns Report

The new Shopping Campaigns report in the AdWords section of Google Analytics will begin rolling out over the next few weeks and will appear automatically for advertisers that have linked their AdWords and Analytics accounts. The report will offer deeper insights into Shopping Campaigns performance including the product categories that drive site engagement and revenue for bid optimization.

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Beyond Tag Management: The Future Of Advertising Data

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In part 6 of this multi-part series on tag management, contributor Josh Dreller discusses where advertising data is headed and and what we can do to get there.

Throughout this series on Tag Management Systems (TMS), you’ve read about tags, how to manage them, how to evaluate TMS vendors, and other tag related issues.

Tag management is certainly an important part of online marketing to date, but marketers are beginning to realize that better tag management only takes advertisers and the digital marketing ecosystem so far.

Simply put, tag management is just one slice of the advertising data pie that marketers need to wrangle. Yes, tags are a crucial component for collecting web data, but your data doesn’t just live on a website, mobile website, or where JavaScript can be implemented.

Your customers interact with your emails and your ads. They engage with you within tablet and smartphone apps. As well, some of your valuable, offline customer data can be translated into digital signals that cannot be collected with tags (such as what lives within your CRM, your point-of-sale systems, your kiosks, and even your call centers.)

Also an important aspect to consider is that much of the future of digital marketing data will live in wearables, Apple Pay, beacons, etc. which can’t all be collected by tags either.

Of course, a lot of your data lives where tags can reach, so comprehensive and easy-to-use tag management is still going to be a very important component to your future advertising data strategy, but for you to unlock the full power of your advertising data, you will to think beyond simple tags.

Tags = Data Collection

What are tags anyway? When a technology vendor or publisher sends you a tag to place on your site, what they’re looking for is access to data. These tags give them a small window of insight into the engagement you have with that customer and then each partner uses that intel to power their systems.

For example, just some of the marketing actions that can be powered via site tags…

  • A Retargeter Or Ad Network can target media to specific customers based on the products they viewed or purchased
  • An Email Platform can segment customers into the most ideal segments for future messaging
  • A Dynamic Creative Or Content Personalization Engine can automatically begin to customize paid or owned media assets to be more relevant to each customer
  • A Measurement Or Attribution Platform can track customer behavior to better assess and analyze how your media works together to impact and influence customers to take action

So, if the purpose of tags is to enable an advertiser to share data with its partners and platforms, and tags can only get you part of the way there…then the future of advertising data is for marketers to share their entire dataset with their partners, not just what can be collected with tags.

The concept that marketing will be highly data-driven is not a new one. In fact, most marketers would agree that it is inevitable. But how do we get there as an industry?

Making Data Easy To Use Is The Real Future Of Advertising Data

Long term, if working with data becomes as easy to marketers as any working on any other ad tech platform, it will eventually be distributed throughout the marketing ecosystem and finally impact marketing goals across every channel.

To realize this vision of ubiquitous ad data, the marketing ecosystem must make using data simple and approachable. To do this, four things must occur:

• Simplified Data Interfaces. For the most part, raw data is something only someone with coding and/or SQL skills can easily manipulate into useful streams. Third-party audience data has taken off because of its ease of use, allowing programmatic marketers to easily choose audience segments from drop down menus.

For years, media planners have subscribed to research firms such as comScore and Nielsen which provide very easy access to powerful market data. But your most valuable asset, your first-party data, is likely trapped in various technology silos. Imagine if all your data was easy to access, and you didn’t need to be a data scientist to use it.

• Easier Data Collection. Getting to their customer data has always been a problem for marketers. As more and more ad tech platforms emerge, the more disparate data there is. Tag management takes marketers pretty far with website data though the full dataset is still hard to reach for many marketers.

However, new tools are coming online that will help to ease this pain point. There are only a handful of methods that are actually needed for a marketers to be able to collect their entire ad data set (pixels, tag containers, SDKs, APIs, etc.) so we will certainly master data collection over time.

• Universal Data Standards. It’s still a bit of the wild west when it comes to data. Even if you can get your data easily out of your various customer engagement points, it’s hard to match up files from different systems.

For example, one of the most common data fields in digital advertising is impressions. In some systems, it’s called impressions, but in others, it is called imps, served impressions, display impressions, viewed impressions, purchased impressions, etc.

There’s literally a language problem between ad tech platforms that needs to get figured out before data can truly become as portable and flexible as it needs to be.

• Every System Handling Data In Real-Time. Marketers know that the value of data decreases rapidly over time. Many marketers haven’t yet studied the effects of data decay but most understand that data does have a “use by date.” Customer signals (such as which search terms brought them to your site, which email offers they just clicked, what actions they just performed within your app, etc.) must be acted upon quickly before the window of opportunity with each consumer closes.

To really be able to maximize the power of ad data, the speed between the collection of a customer signal to marketing action has to occur in near real-time.

If the previous four challenges can be overcome, more marketers will begin using advertising data more frequently and the data-driven approach will go mainstream.

The First Step Is Centralization

Data has been a bit of a bane for marketers. The marketer skill set has generally revolved around campaign planning, targeting consumers, and messaging, while data has been handed off to other teams (i.e., web analytics, IT, business intelligence, reporting, etc.) However, as data becomes more portable, easier to manage, and tangible, marketers are getting involved.

Even though the future of ad data is “data everywhere”, the first step is for each advertiser to finally get their customer dataset into a centralized hub so they can use it wherever and however it can help them or their partners to maximize the results of their marketing.

Final Thoughts

Remember, tag management is certainly an essential way for a marketer to gather and distribute their website customer data, but the future of ad data goes far beyond the browser. Mobile apps, wearables, connected TV, Apple Pay, beacons, all can provide valuable customer signals which marketers must wrangle to truly become data-driven.

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Have We Reached “Peak Android”?

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Google should be happy that Android may have topped out.

Just as Google’s US search market share seems to have topped out at about 67 percent, Android’s global market share may also have peaked at 85 percent. So says hardware counter Strategy Analytics.

As quoted in the Wall Street Journal, a Strategy Analytics analyst opines, “Unless there is an unlikely collapse in rival Apple iPhone volumes in the future, Android is probably never going to go much above the 85 percent global market share ceiling.” Rival firm IDC similarly shows Google with a roughly 85 percent share of smartphones shipped in the most recent quarter.

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While shipments are not equal to sales, I would submit Google doesn’t want its Android market share to go much higher. Any higher and the company would face the likely eventual wrath of regulators in Europe and elsewhere (except the US).

The Journal article points out that Google has made increasing efforts to consolidate Android and permit fewer manufacturer variations and “forked” versions. This benefits the company, platform and developers by reducing fragmentation. However it also brings Google closer to antitrust scrutiny.

Indeed there’s an Android antitrust investigation pending in Europe. And it would be easier to fashion Android-related remedies than it is to try and regulate search results.

Google’s argument against any potential Android regulation is that it’s an “open” platform and anyone can do anything they want with it. In fact the company has been working hard to control that among the top-tier Android OEMs with contracts that require pre-installation of Google apps and define the placement of those apps on the home screen. If you want access to Google Play you have to abide by these rules.

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Google is walking a fine line between exerting more control over its operating system and not so much that it’s vulnerable to antitrust arguments, given its market share dominance. According to Gartner Android devices will be nearly 4X as numerous as Windows devices by next year on a global basis.

Simply put, Android is the dominant computer operating system across the globe. That’s a remarkable accomplishment in only six or seven years.

The following is how StatCounter reports global internet traffic by platform (mobile and PC):

  • Windows: 60 percent
  • Android: 19 percent
  • iOS: 13 percent
  • Mac: 5 percent
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Tablet Traffic: Samsung, Microsoft Gain, iPad Remains Dominant

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iPad still drives roughly 80 percent of tablet traffic.

Ahead of the holiday shopping frenzy, ad network Chitika is releasing its semi-regular report on the tablet usage in North America. The iPad remains far and away the traffic leader, though Samsung and Microsoft have seen year over year usage gains.

Market share figures from Gartner and IDC show the iPad losing share to Android tablets. But those data are based on shipments, not actual sales or usage.

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According to Chitika, looking at millions of North American ad impressions in September, iPads were responsible for about 80 (79.9) percent of traffic. That’s down somewhat from 81 percent last year.

Samsung saw a nearly 1 percent (0.9 percent) gain during the same period. Microsoft grew 0.6 percent. Chitika clarified that the Microsoft gains do not include Surface Pro models but are a result of Surface 2 sales and usage. Had Surface Pro been included I suspect the numbers would be larger.

The Verizon branded Android tablet, introduced in 2013, also saw traction, with now a 0.5 percent share.

Compare the following StatCounter North American tablet traffic data. The numbers are generally in agreement with the Chitika data:

  • Apple/iOS: 78.2 percent
  • Android: 15.7 percent
  • Linux: 5.1 percent
  • All others: 1 percent
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Fixing Programmatic: Start At The Top

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Publishers worry about the loss of revenue associated with the shift toward programmatic ad buying, but columnist Rob Rasko believes there are ways to solve this problem.

“The only way out is through…”

One of the greatest fears publishers face is an impending loss of revenue, based on the spread between what they earn selling their premium inventory and what they earn from programmatic.

In some instances, the delta between publisher premium and programmatic can be as great as ten to one; in other words, some publishers’ programmatic ads are earning only ten percent of what their premium counterparts earn.

Since programmatic is here to stay, this delta in earnings has to be closed if publishers are to remain profitable.

As discussed in our previous article, Don’t Be Spooked By The Fear Of Programmatic Ad Buying, changes around programmatic are creating opportunities in digital media for all stakeholders.

But, the way these changes pay off has yet to be seen by the publishers who are scrambling to determine how they can remain profitable in a paradigm where their earnings are being cut by ninety percent.

The best way to overcome this problem is to embrace the changes ahead and find a solution to increasing profitability, while at the same time moving towards an automated way of buying and selling ads.

Thankfully, There Are A Few Options

There are two obvious solutions to making programmatic more profitable for publishers: the top-down and the bottom-up approach.

The latter involves increasing efficiencies, including creating better yield management practices and incorporating better technology.

The former focuses more on selling programmatic deals, educating your team on how to sell programmatic, forming new relationships with agencies, and getting buyers to ask for your brand via technology automation.

Both sound like reasonable approaches with promising results. Ultimately, however, one approach is the best solution long-term.

Start From The Top

The key to profitability lies in a solution with limitless opportunities to continuously generate revenue – as opposed to one where revenue growth is restricted by the number of efficiencies that can be optimized.

In our client work, the top-down path has consistently proven to be the approach that gets the job done. It is the only viable, long-term solution to shrinking the delta between publisher premium and programmatic ad buying.

While the bottom-up approach requires every last efficiency to be optimized, it doesn’t take into account the scarcity of ways in which these optimizations can occur.

The result is a limit in the potential ability to reclaim the revenue lost when buying programmatically.

Conversely, the top-down approach can be hugely expanded and creates the ability to become, over time, even more profitable than before.

The top down approach focuses on publishers creating greater demand for their brand, which results in an increase in bid density and queries per second (QPS). Higher bid density paired with an upsurge in QPS naturally generates opportunities for publishers to increase profitability.

A Competitive Advantage

In essence, the top-down approach can offer not only an increase in profitability for those who excel at its implementation, but it can also create a competitive advantage for early adopters who see the upside of investing in their sales team’s training and creating demand for their brands.

The wisest publishers should spend time and money developing these core areas of their business in an effort to gain market share with regard to the demand for their brand.

From Problem To Possibility

Change is always the driver of innovation. As an industry, digital media is evolving rapidly, and those changes are producing great strides in innovation.

Malcolm McLean was a historic figure who fundamentally transformed the shipping industry by containerizing cargo via ship as opposed to ground.

This radically reduced the cost of shipping by a factor of 36 times and energized global commerce markets – not to mention setting the stage for companies such as Amazon, eBay and Walmart.

Similarly, digital media will be fundamentally changed as programmatic is more heavily embraced and the ability to increase profitability from use of programmatic increases.

McLean knew the challenges he faced actually presented the industry with new opportunities. Likewise, the best digital media pros understand that the biggest upside in programmatic has yet to be realized. Great profits and successes await those who take a top-down approach to programmatic selling.

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Native Advertising Disclosure & Transparency: Who’s Responsible?

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The need for native ads to be clearly marked as such is clear, but columnist Rebecca Lieb notes that the onus hasn’t been placed firmly on any one party to make that happen.

We can all pretty much universally agree that with native advertising comes the obligation of disclosure and transparency. That means clearly and unambiguously indicating that yes, this is an ad, paid for by Acme Corporation.

Yet, how to provide disclosure remains a murky area — hardly surprising given how quickly an extraordinarily wide variety of native advertising products have emerged on all sorts of platforms, ranging from traditional publishers, to in-app and in-game ads, recommendation engines, display units, and a host of other formats.

As the Word of Mouth Marketing Association (WOMMA) puts it in a newly released white paper on the topic, “the key principle is one of transparency.”

Readers and consumers have the right to know (in WOMMA’s language) “when the content was written by or placed by a marketer, or someone acting on behalf of or at the direction of a marketer, rather than the publisher of the editorial content in which the sponsored content appears.”

And, as WOMMA correctly points out, the FTC has been issuing guidelines on disclosure dating back as far as the 1960s (advertorial) and as recently as search engine advertising (in this millennium).

WOMMA is calling for clear and conspicuous native advertising disclosure, as has the IAB.

The paper, while correctly noting that native is clearly an evolving and therefore difficult to define sector, asks an interesting question:

Who is disclosure incumbent on?

Is it the publisher? The brand? The marketer, agency or “widget”? (Note: “Widget” could be interpreted as ad unit or vendor, but in this case appears to refer to recommendation engines, e.g., Outbrain and Taboola.)

WOMMA has a distinguished history of working for ethics and disclosure in innovative forms of digital marketing; but, in this case, I’m not sure I agree with the question.

In my view, the “who” is everyone above. Yet, I believe there is one party that bears the overwhelming burden of responsibility for ensuring disclosure guidelines are clear, transparent, unambiguous and enforced — and that party is the publishers upon whose properties native ads appear.

Ethical publishers have always had advertising policies, standards and practices (as have broadcasters). This legacy of traditional publishing needn’t change significantly in the digital channels.

Additionally, these same publishers have long upheld “church and state” guidelines that govern how, when, and sometimes even if the publishing side of the house can interact with editorial (and vice versa).

The problem in native advertising now is that publishers, desperate for native advertising dollars, are too often adopting an “ads first, policies later” approach to the medium. Unfortunately, the lack of a clear distinction between ads and editorial content likely isn’t sustainable long-term, as it compromises and erodes consumer trust.

While WOMMA is to be commended in calling for greater transparency and disclosure in native ads, it must be noted that the organization counts zero publishers as members. Overwhelmingly, it’s brands that comprise WOMMA’s membership. They are to be applauded for the effort, but the rubber hits the road elsewhere.

The IAB does count lots of publishers among their members, and that body has issued (only) two native advertising disclosure guidelines [PDF].

  • Use language that conveys that the advertising has been paid for, thus making it an advertising unit, even if that unit does not contain traditional promotional advertising messages. 

  • Be large and visible enough for a consumer to notice it in the context of a given page and/or relative to the device that the ad is being viewed on.

Research my team and I published on native advertising goes further. We also recommend that disclosure be provided in a link that provides deeper information, as well as access to a channel for consumer inquiry.

We also maintain that publishers establish, before (not after) native advertising products are developed and sold, clear church-and-state policies, something many, even the venerable New York Times have — quite shockingly — not yet addressed.

Setting transparency and disclosure guidelines for native advertising isn’t something anyone’s waiting for the FTC to do.

The FTC last year called hearings on the topic, routine operating procedure. Just as they’ve done with email, search and word-of-mouth marketing, these hearing are a signal to the industry: “regulate yourselves, or we’ll do it for you.”

With the exception of email (which was already headed to Congress for legislation, the CAN-SPAM Act), this has been a clarion call for trade organizations to rally and set standards.

The IAB’s standards are fine, but inadequate. They simply don’t go far enough, unsurprising for a body devoted principally to advertising, not publishing.

WOMMA wants to encourage marketers to lobby for publishers to uphold better standards. Noble, but unrealistic. The OPA has (characteristically) maintained a low profile. The American Press Institute held an excellent native advertising forum (at which I participated), but has issued no publisher guidelines.

As someone who has been deeply and actively involved in researching the topic of native advertising for a year and a half, this lack of response and initiative on the part of publishers is alarming, to say the least. Native advertising has many detractors and finger-pointers. Prominent and influential commentators such as Bob Garfield call it indefensible, duplicitous and unethical.

It needn’t be, and it shouldn’t be. But if publishers don’t get their houses in order, native advertising, which could be a salvation, will instead be their downfall. Publishers, after all, are the ones who create the product, and oftentimes, the content that comprises native advertising.

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How Programmatic Is Evolving Traditional Branding

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Programmatic doesn’t necessarily have to mean direct response. Contributor Dax Hamman explores some trends making this tactic suitable for branding campaigns, as well.

Today’s CMO has become accustomed to approving programmatic marketing budgets. The perfect combination of price, performance, and accountability is very appealing to the CMO.

However, campaigns that fall into the “branding” bucket are still commonly bought at the site level, not the audience level.

There is a groundswell of change, and branding is one of the fastest growing armies in the programmatic march. In part, this comes from better understanding.

Real-Time Doesn’t Equal Trash

Historically, real-time inventory was considered the “trash can inventory” that no one else wanted to buy. It was perceived as cheap and available enough to warrant a direct response campaign.

But when it came to influencing emotions about their companies, CMOs stuck with more immersive experiences that allowed them to grab some of the affinity that the publisher themselves had built.

That is not a mistake if you think of real-time media as a whole. Programmatic is actually the intelligent layer built on top of the “dumb” layer that is raw ad impressions.

Use Programmatic To Your Own Purposes

The “programmatic promise” is where the magic happens. Think of your beloved Lego bricks from childhood. In that big box is a pile of multi-colored plastic blocks, which don’t inspire the imagination. But when you start putting them together you build worlds, people, houses, and even spaceships! Programmatic is like building those bricks into what you want.

Today marketers use real-time media when they buy something like a standard retargeting campaign. Someone visited their site, then they abandoned it, and next they are shown an ad. That’s a lot like just picking out all of your yellow bricks and putting them into a pile.

Programmatic is more complex, obviously. Sticking with the Lego bricks example, the idea that you want to build a spaceship would be your starting point, much like the goals a CMO might have to find a certain audience and bring awareness to their brand.

Just as you would carefully sort through your Lego box looking for straight pieces, short pieces, and those funny little circles that looked like lights, programmatic buying is the same. We take that idea of the goal and we combine data, media, timing, and individuals intent to build a branding program that balances all the needs to produce your original (spaceship) goal.

Better Media Choices Are Now Available

In part, this new wave is supported by the accessibility of better media for programmatic campaigns. Display banners, video, Facebook, Twitter and “native” formats have all turned themselves into Lego bricks.

The tools to monitor quality have also improved, with fraud being actively tackled and viewability measurement becoming more realistic. Even something similar to premium buys is possible with programmatic thanks to PMPs (Private Marketplaces) and premium exchanges.

There is however a final sticking point CMOs must overcome, which is accountability. We are accustomed to measuring digital with conversions and clicks, which aren’t metrics that translate easily to the branding world where influence, unaided recall, and gross rating points (GRPs) reign supreme.

To take advantage of the cost savings, and the benefit of easily finding new audiences, we must make some compromises.

A Video Example

As an example, at my company recently ran 10 video campaigns for major brands across a number of industries. We used the same creative as their premium video branding campaigns and had the same audience to reach.

By using data, and balancing that with price and placement, we drove average completed views that were 3x that of their old campaigns. The reason is simple; those CMOs were smart and leveraged the data to find the right people.

In other cases, marketers are using programmatic to have their audience do the influencing for them. They use Programmatic as their mechanism to find the right people through Facebook and Twitter and serve them relevant content that those influencers want to share. Often supplementing those campaigns with high-frequency banner and video programs to make sure their message sticks.

As a CMO, should you be buying real-time media to build your brand? No. But you should be using the capability that real-time media brings to target single individuals. Then use the power that programmatic offers to turn your “marketing imagination” into amazing results.

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Google Patent For Ads That Follow You Surfaces

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To combat “garish” banner ads, expandable text ads could link to relevant content while remaining present on the user’s screen.

Imagine if after clicking on an ad, it expanded and then persisted as you navigated to additional web content linked to from the ad itself.

That’s what’s laid out in a Google patent that recently popped up in the public records and has gone unnoticed. The patent, which dates back to 2003 with a continuation made in 2011 (US 8838479), is titled “System and method for enabling an advertisement to follow the user to additional web pages”.

In a vision for moving beyond “garish” banners, the patent outlines a system for delivering ads that enable “a user to obtain additional Internet-based content while still viewing the advertisement”.

The problem the patent aims to solve is: “The annoyance factor of ads today causes many people to not want to investigate what the ads are offering, even if they really offer something useful. Clearly, people are not happy with existing advertisements, such as graphical banners,” wrote the patent’s author, Ross Koningstein, one of the inventors of Google AdWords, and now Director Emeritus of engineering at Google.

Interestingly, the patent shows examples for these ads appearing on both search results and third-party content sites.

Morphing Ads

These days, rich media ads that transform are nothing new, but in this patent a standard text ad would be able to “morph” into an expanded format that gives users more information about the advertiser.

In the example below, a user searches for “wildlife tours” and is presented with two ads. A magnifying glass icon (110) appears on the second ad signifying that there is more information available.

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The expanded version of the ad could then look something like this below with images, additional copy, a business listing and menu tabs (230, 240) for more information.

(On a side note: nothing is mentioned in the patent about the “Interest” bar that appears in the ad examples.)

This ad is depicted in both the search results setting shown here and in a content network setting.

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From the patent: “Offering users expandable advertisements gives them the ability to safely investigate information about the advertiser and/or its products before going to the advertiser’s designated target location (e.g., its target web page).”

Linking To Additional Web Pages

The menu tabs are where the bonus comes in.

Advertisers would be able to designate related pages to display when a user clicked on a menu tab (or some other kind of navigation functionality). Clicking on a tab could bring up additional content in the existing browser window, trigger a new browser window to open, or activate pop-up windows with additional information, according to the patent. The ad remains persistent on the screen and “follows the user” as they navigate other web pages linked to from the menu tabs.

The link could bring up related search results, content from the site the ad displaying on, content from a different site entirely or map listings and weather information.

When I was first reading the patent, I assumed the additional web content would typically be from the advertiser’s own site. But instead, in both examples provided, the pages are for related content from the site or search engine the ad appears on.

In one example, a menu tab in the Wildland Tours ad below for “Logowear” (Fig. 7), triggers a page of pictures relevant to the advertised wild life tour – it’s a search results page of images related to what users might see on a tour displays.

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While the patent does have a caveat for linking to other third-party sites, the idea of linking to the advertiser’s site isn’t explicitly mentioned. The emphasis is on linking to pages that are “hosted or affiliated with the content/advertisement system to again provide the feel of a safe confined experience for the user”. More from the patent:

“As people get used to such advertisements, it decreases their inhibitions to investigating advertising content, and increases the exposure of advertisement host’s information (if not their web sites)”

In another example, a menu-driven ad includes a link to view gear items for sale that are related to the advertiser’s suggested items for bringing on one of its tours.

Users can navigate around that page, and even make a purchase while the ad remains present. “Thus, the advertisement may record feedback from the user at the point of purchase to determine the effectiveness of the advertisement, etc.” Again, the odd thing here is that in the example, anyway, the items aren’t being purchased from the advertiser’s own site.

If the user wanted to return to the original content or search page, they could do so by clicking on the home icon (220 in the first image above) shown next to the menu tabs.

Advertisers could also potentially block out other ads. “Given the finite amount of space for such advertisements, advertisers may be given the opportunity to exclude other advertisements and thereby gain additional space for their particular advertisement by expanding to cover those advertisements”. In the display context, this isn’t particularly radical, but it certainly is in the context of search.

Will We See Ads That Follow Us?

Today, when video and rich media ads can be served quickly to any device, the banner is as threatened as ever. But this patent, in part, is a reminder of how far we’ve come since the days of swinging monkeys and blinking slot machines. Low click-through-rates on today’s ads are seen as a result of “banner blindness” as oppose to safety fears about what happens if we dare click. Let’s not forget that banners weren’t left behind as mobile has taken off.

And, that’s one thing that sticks out when reading this patent: there is no mention of mobile, not to mention mobile apps, even after the 2011 continuation. It’s interesting to try to re-imagine this format in today’s mobile environment. The patent does note that the ads wouldn’t necessarily have to morph for the ads to be able to link to other content, which could be more conducive to mobile screens.

So now that this has been made publicly available, will we soon see ads that follow us? Asked about the patent, a Google spokesperson said, “We file patent applications on a variety of ideas that our employees come up with. Some of those ideas later mature into real products or services, some don’t. Prospective product announcements should not necessarily be inferred from our patent applications.”

I have trouble seeing the value in either of the patent’s examples in terms of persuading users to click through on the tour company’s ad. I can’t envision this playing out in any way other than having those links go to the advertiser’s own site.

It would be pretty nifty to be able to book concert tickets, buy a new bag or submit a quote for car insurance without having to leave the article I was reading.

I could see the expandable text ad format itself working in a number of scenarios, particularly in local listings.