Android, App Monetization and Who Owns the Customer Data
Published on 23 Nov 2010
I recently spent a whirlwind week in San Francisco, booked up with mobile conferences and related meetings. From Open Mobile Summit, Appcelerate to Under the Radar (not technically a mobile conference but really, what technology conference isn’t about mobile these days?), a few key themes emerged.
What everyone is talking and thinking about for mobile:
This emerging mobile platform continues to be on everyone’s mind. Google’s Android presents massive opportunity, not just in sheer volume of devices on the platform ( for every iPhone today, there are about six new Android devices coming down the pipe) but with the monetization potential. A recent report from mobile ad company Millennial Media found that Android ad revenue has, for the first time ever, beaten iPhone ad revenue on the company’s ad network. So Android ads are generating more revenue. Why? According to Millennial, most Android users are first-time smartphone buyers, and advertisers are willing to pay a premium to reach those users early in their smartphone experience.
We are advising all our customers to build across platforms as they develop their mobile strategies. There is so much potential on Android (not to mention BlackBerry, Windows Phone 7, Nokia and others) and you can’t even do in-app purchase yet. Which leads me to my next theme…
We strongly believe, and our data points to this, that in-app purchase will become the de facto strategy for monetization of mobile apps. This is the secret that I think a lot of people have been looking for in mobile.
Everyone is talking about the recent study from Flurry, which identifies in-app purchases as the leading source of revenue for social networking and social gaming applications. (There’s that social thing again…) As of September, in-app purchases accounted for 80% of revenues generated by mobile developers. Revenue from in-app purchase has already eclipsed that of advertising, and this functionality isn’t even available on Android yet. When that happens, stand back because the gold rush will officially be ON. (and BTW, when it is available, Urban Airship will support it. You can count on that.)
How can mobile get more social? We’ve seen some brilliant success in mobile apps that use social aspects to engage and monetize. Look at Tapulous, one of the very first companies to use push notifications in its popular gaming apps. The company boldly incorporated a social element to its messaging. When a user played a game, he or she could challenge a friend to beat that high score via messages sent directly to that friend’s device. The “it’s on” competitive mentality was a perfect match for the technology. Tapulous found success by marketing outside its client base, and this is a great blueprint we hope to see many apps follow on the road to success moving forward.
Data & Demographics
The ongoing discussion about who owns the customer rages on. By that we mean, who has access to the user behavioral data? Who should? The content provider / app maker? The platform? The carrier?
Most agree that today the platform owns that data, but that they will continue to feel pressure to share that data. One thing is clear: the data = value, insight and equity. There is definitely a need for vendors to help mobile publishers mediate the territory, establish insight across platforms so they can effectively engage and monetize the users of their apps.
These conversations are just getting going and many of them will continue into 2011 and beyond. As I always say, things are just getting interesting.