3 opportunities and 3 challenges for marketers and content producers in the App Economy for 2017 and Beyond

1. State of the
App Economy:
3 Opportunities and
3 Challenges
Eric Benjamin Seufert
Online Marketing Rockstars
March 3rd, 2017

2. Who I am
Heracles Mobile Dev Memo Freemium Economics

3. Who I am

4. Presentation Structure

5. Presentation Structure
1) Current State of the App
Economy;

6. Presentation Structure
1) Current State of the App
Economy;
2) 3 Challenges & Opportunities
in 2017.

7. Presentation Structure
1) Current State of the App
Economy;
2) 3 Challenges & Opportunities
in 2017.

8. Current State of the App Economy

9. • Tech giants own considerable mobile
audience and that audience is growing;
Current State of the App Economy

10. Source: Nielsen
Current State of the App Economy

11. - 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
Current State of the App Economy

12. - Many of these apps are ad
channels and / or
third-party content
distribution channels.
*
*
*
*
*
*
*
Source: Nielsen
Current State of the App Economy

13. Google Maps is an ad
channel and / or
third-party content
distribution channel?
Current State of the App Economy

14. Current State of the App Economy

15. • Tech giants own considerable mobile
audience and that audience is growing;
• Tech giants are turning their apps into
content consumption platforms;
Current State of the App Economy

16. Current State of the App Economy

17. Current State of the App Economy

18. • Tech giants own considerable mobile
audience and that audience is growing;
• Tech giants are turning their apps into
content consumption platforms;
• Increased consumer engagement / spending
on mobile continues to drive advertising
budgets.
Current State of the App Economy

19. Source: SensorTower
Current State of the App Economy

20. Source: SensorTower / Unity
*Applies specifically to mobile gaming
Current State of the App Economy

21. Source: Flurry
Current State of the App Economy

22. Source: eMarketer
Current State of the App Economy

23. Source: eMarketer
Source: Zenith
Current State of the App Economy

24. Source: eMarketer
Current State of the App Economy

25. Source: eMarketer
Current State of the App Economy

26. Facebook is at the center of much of this
growth, pushing new innovations in video
and other mobile placements;
Current State of the App Economy

27. Source: Facebook Q4 2016 10-Q
Current State of the App Economy

28. Source: Facebook Q4 2016 10-Q
Current State of the App Economy

29. Presentation Structure
1) Current State of the App
Economy;
2) 3 Challenges &
Opportunities in 2017.

30. Challenge / Opportunity:
Making sense of proliferation of
new platforms for user
engagement / content
consumption.

31. 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

32. 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

33. • Tech media sometimes uncritically promotes all
emerging platforms as ascendant “next big thing”;
3 Challenges & Opportunities in 2017

34. • Tech media sometimes uncritically promotes all
emerging platforms as ascendant “next big thing”;
3 Challenges & Opportunities in 2017

35. • 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.
3 Challenges & Opportunities in 2017

36. • Example: VR vs. Mobile Gaming
Source: SensorTower / Unity
3 Challenges & Opportunities in 2017

37. 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.
3 Challenges & Opportunities in 2017

38. Challenge / Opportunity:
As mobile video advertising
surges, attribution and ROI
calculation becomes
problematic.

39. 3 Challenges & Opportunities in 2017
• Many developers rely on patchwork
marketing infrastructure comprised of many
3rd party tools:

40. Data Warehouse
(S3, etc.)
Data Visualization
Tool (Tableau,
etc.)
Attribution
Platform
Ad Network Cost
Aggregation
Platform
Ad Networks
N1
N2
N3
PMD
3 Challenges & Opportunities in 2017

41. Data Warehouse
(S3, etc.)
Data Visualization
Tool (Tableau,
etc.)
Attribution
Platform
Ad Network Cost
Aggregation
Platform
Ad Networks
N1
N2
N3
PMD
Marketing Team
3 Challenges & Opportunities in 2017

42. Data Warehouse
(S3, etc.)
Data Visualization
Tool (Tableau,
etc.)
Attribution
Platform
Ad Network Cost
Aggregation
Platform
Ad Networks
N1
N2
N3
PMD
Marketing Team
3 Challenges & Opportunities in 2017

43. 3 Challenges & Opportunities in 2017
• Shifting to video complicates this further
because clicks / installs aren’t attributable;

44. 3 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;

45. 3 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;
• Probabilistic models help advertisers match
clicks / installs to campaigns.

46. 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.
3 Challenges & Opportunities in 2017

47. Challenge / Opportunity:
Growth of Walled Garden
advertising platforms.

48. 3 Challenges & Opportunities in 2017
• The biggest mobile advertising platforms are
becoming siloed, both in terms of tool
offerings and inventory offerings;

49. 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
3 Challenges & Opportunities in 2017

50. 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
3 Challenges & Opportunities in 2017

51. 3 Challenges & Opportunities in 2017
• 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;

52. 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
3 Challenges & Opportunities in 2017

53. • NOTE: This segmentation is soft. Every type
of app is & will continue to be advertised
everywhere;
3 Challenges & Opportunities in 2017

54. 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.
3 Challenges & Opportunities in 2017

55. http://hrcls.co
eric@hrcls.co
@eric_seufert
Thank You!