Here is a 25 minute lecture I gave at Casual Connect in San Francisco on July 20014. The focus is on how to leverage metric driven design and emotional targeting to improve the performance of your mobile app or game.
[Originally posted on NativeX Voices September 3rd 2014]
Partnering with a controversial and social media savvy celebrity like Kim Kardashian can save game developers hundreds of thousands of dollars in user acquisition. You have an immediate advantage over other games because of the likeness of the celebrity, their ability to promote your game, and the impact their brand has on editors from the various app stores who like to feature games with popular figures.
This strategy can also backfire because celebrities are really expensive and some of them might not be receptive to your ideas. They also might get caught up in a scandal right after you release the game. With that said, the astronomical success of Glu’s Kim Kardashian: Hollywood has more developers thinking about creative ways to leverage the popularity of celebrities.
To help you get your creativity flowing for your next hit game, I put together a list of six celebrity games I would like to play.
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Introducing a new Mini Multi-Offer ad format “Triad.” Triad combines the latest mobile video ad technology with NativeX’s industry leading selection of native advertising formats to give users the choice of which ads to engage with. Triad joins the NativeX Discovery Suite to give developers the right ad format to optimize strategic placements in their apps for a more native experience with higher impact.
Read the Full Post Here.
[Originally posted on The Next Web June 7th 2014]
If you only know about native advertising as it’s described in most major media coverage (such as this recent Wall Street Journal report), you might assume the ad format is little more than ads that resemble Facebook updates, or sponsored articles attached to genuine editorial. Indeed, native ads were implicated in the recent strife at the venerable New York Times.
There’s a rich irony to this narrow definition: The New York Times itself, along with every other major media publication, is desperate to shore up its revenue base, especially as the market shifts to mobile – but still largely view native ads as a devil they may need to make a deal with, but only at a painful compromise to their editorial values.
It doesn’t have to be this way, because game developers (as they often do) have pioneered a workable direction. If media companies followed their lead, perhaps they’d earn more revenue without further blurring the lines of advertising and editorial. And in the process, help save our struggling media industry as a whole.
Continue to read the full post here
Here is a little video interview I did while attending VentureBeat’s Mobile Summit 2014. The focus is on how my company NativeX got into creating native monetization tech for games, and what needs to happen to see native monetization scale.
[Originally posted on Gamasutra April 24th 2014]
Google recently introduced an important new rule prohibiting deceptive promotion of apps on Google Play. It’s great that Google is clamping down on spammy advertising. However, the new regulation doesn’t really address a core, underlying cause for the practice: broken app discovery. With more than two thirds of apps failing to break even, it’s no surprise that some indie devs desperately turn to sketchy ad practices or bot farms that manipulate rankings. Of course, Apple’s App Store struggles with the same woes as well, but given that Google’s core competency is content discovery, it’s fair for the market to expect much more from Play.
Fortunately for Google, there’s a number of means to quickly gain the edge on discovery over Apple. In the process, the search giant can greatly help the independent developer community. (Which, after all, makes up the majority of app developers.)
•Reform the Ranking System: At the moment, Google Play’s “Top Apps” lists are too directly tied to ad spend. Most indie developers don’t have a large enough advertising budget to compete on this playing field, and consequently, none but the very most successful indies last long enough on the top ranks to be noticed. To make things even harder for indies, most Google Play users only download apps from these Top Apps lists. One solution is to create indie-only lists (see below). Google should also tweak its general ranking algorithms to give more prominence to apps gaining traction without ad dollars.
•Address the 5 Star Problem: Similar to the crippled ranking lists, many or most apps with consistent 5 star ratings got them not through organic acclaim, but by working the system. (One common, if very dubious technique: An app prompt asks users if they like the app, but are only taken to the app store to post a review if they answer “Yes”.) There are a number of ways Google could reform this system; here’s just two ideas: 1) Only allow app ratings after fifteen total minutes of gameplay, to curb unfair judging; and 2) Add a pop-up prompt automatically – directly from Google Play – so the users never have to leave the game. This is important to ensuring that the true app ranking score is captured. (The latter is important because most developers don’t typically send users who don’t like their game to the app store, so the majority of reviews are not a good representation of the broader gamer population.)
Continue to read the full post here
[Originally posted on The Next Web February 28th 2014]
Thousands of apps launch each day, so the mobile app business must be booming, right? Not exactly.
Sure, thousands of apps are launched daily, but how many actually make money? Last I checked, products must generate revenue to qualify as a business. And generating money is where apps fail, miserably.
A recent Gartner report spells out the harsh forecast facing developers, which their industry still has yet to confront: Over the next few years, only an estimated .01 percent of consumer apps will be considered a financial success by their developers.
Currently, according to a global survey, 60 percent of developers make less than $500 a month off of their creation. So, what are the .01 percent doing right? And what can developers do to increase that success metric?
The answers to these questions range from simple to complex. But, regardless of the approach, there’s one simple word that developers can’t escape if they want to succeed: Advertising.
While there are no revenue guarantees, developers who specifically study in-app advertising and engagement strategies are on the right track to success.
Balancing in-app engagement with payments
Developers’ first mistake is focusing their business model only on in-app payments. Though in-app payments account for a majority of revenue currently being made by apps, even within game giants the percentage of overall users who make in-app purchases is less than 10 percent.
Instead of trying to squeeze more out of the small minority of users that make purchases, developers need to embrace advertising, refocus on the other ninety-plus-percent of their users and think about the characteristics that define any successful ad to keep those users engaged.
Developers can monetize the vast majority of their user base by integrating ads in a way that doesn’t disrupt the intended experience to earn maximum revenue with minimum annoyance to users.
Sure, in-app purchases – fueled by a small, but devoted user base – remain a vital revenue driver for most games in the market. However, to build a business that will not only survive but thrive in the long-term, developers must learn to strike a healthy balance between purchases (call to action) and entertainment (engagement).
Design your success natively
Developers and designers alike do their best work when thinking about the user experience. So, in order for in-app advertising to be effective, ads must follow some basic elements centered around Native Design.
In essence, Native Design seeks to make the ad look like it’s part of the app by being contextual and complementary to the content of the app, not above, below, or beside, but a real part of the user experience. Surprise breaks the pattern and attention of the user.
In order for ads to follow seamlessly and keep the attention of a user, they need to seem like they were conceived with the app at the origin using the following tactics:
Using characters and settings from within and app or game gives ads a better chance of engagement due to the relevance of the assets.
Because of their familiarity, associations should be used to create positive emotions and credibility, feeling more welcoming to players than ads without such connections.
Color and Contrast
Colors like red draw attention to users, but keep in mind the associated colors of the app to appeal to the overall Native Design aspect.
For example, colors of yellow and orange might bring out more feelings of optimism and friendliness compared to blues and greens, which are more associated with calmer feelings, but those colors need to correspond with what a user has already seen in the app.
Lines and Gaze
Eyes attract attention and gaze creates curiosity. Using those images along with the proper lines to lead a user’s view can cause immediate attention.
For example, having an associated character from the app or game looking toward a video or advertising offer can guide a user’s eyes toward keep words or actions such as downloads.
Movement and Action
Moving parts, either from associated characters around the ad or within the ad content, can cause an immediate reaction and engagement from a user, but learn the lessons of the Web – the movement can’t sour the original content.
The playable, often annoying flash-animated banner ads on websites were quickly scorned for being too distracting. Subtle movements can go a long way without being tiresome to players.
Does the ad have sound? Is there a video component that requires a voiceover or call to action? Often overlooked, ill-conceived sounds can be just as jarring for a user as poor visual design.
But these design elements don’t create the final checklist for an effective ad. There are three other aspects to keep in mind in order to build the best foundation for a campaign.
Time and place can trump all
As important as design is, placement is just as crucial. Consider games, for example: You don’t want to show a player an offer wall advertisement (i.e. one that promotes other items) that blocks the main app content at the onset of the app.
Why? Think about it. They haven’t even had a chance to play the game yet. Similarly, placing ads at times during a coherent or long engagement period can cause users to turn away from the app all together.
Instead, think about inserting points between levels. And use your data. Identify where user “drop offs” are, and use incentive-based ads during those times.
The three biggest guidelines for high-engagement placement include:
User Emotional State
Players go through four separate emotional states during engagement with a game. Serving ads that are in-synch with those emotions continues the tactics of Native Design and not shocking or distracting from the user experience.
Players are typically in a positive emotion state after completing a level or increasing a character’s abilities; during these times non-incentive based, interstitial ads are best.
During negative or challenging emotional states players may encounter when losing a level or failing a character upgrade, serving incentive based video ads are best. And during neutral emotion states like exiting to main menus, serving non-incentive based videos is best.
Ideally, apps need five to six different formats within an app or game. Whether it’s a home screen that has a banner ad or a half time screen that turns into a video, campaigns need to mix in different formats and even different ads.
By doing this, campaigns are helping ensure that users are not seeing the same ad over and over, decreasing app enjoyment and building brand annoyance.
Not all users are equal when it comes to advertising. For example, developers should not bother top users (especially ones that make in-app purchases) with ads that will annoy them and potentially decrease their usage of an app or game.
Once developers start to collect analytic data about users, they may find power users don’t respond well to ads at all. And that’s okay, because developers may find that a small minority of their players (maybe 3 percent) like the offer wall ads or incentive campaigns — i.e., “watch this video to get a power-up,” and then developers can focus on the other 97 percent of their users with additional A/B testing to see what works with what group.
Go forth and build your app empire
Developing effective ads that users respond to positively is an ongoing process, but it’s a process developers must invest as much time in as development if they want to turn all their hard development work into money.
By following the above guidelines, remaining agile and responding to user data, developers will be better equipped to increase revenue several times over while not distracting from the core experience of the great app they’ve put so much time into creating.
[Originally posted on Gamasutra January 24th 2014]
2014 is the year mobile advertising finally gets better. Last year Supercell raked in over $2.5 million a day between Clash of Clans and Hay Day but they were far ahead of the pack. As I predicted last year in Forbes, there were many closures and consolidations in the mobile gaming space. There was also great innovation, with developers giving us great new, hardcore gaming experiences to enjoy on our devices.
Carrying on the tradition from last year, I wrote a few predictions for the mobile gaming market in 2014. Before we dive in, let’s do a quick recap of my 2013 predictions.
Recap of 2013 Predictions
1) More Closures and Consolidations
The Result: Correct.
Unfortunately, nobody was too big to fail in 2013. Among the closures, Fishlabs, the developer of Galaxy on Fire was acquired by Koch Media and THQ (who technically filed bankruptcy in 2012) liquidated its assets. On the consolidation side, Supercell sold a 51% stake to Softbank and Gungho OnLine Entertainment and Hasbro acquired Backflip Studios.
2) Mobile Gaming, The Sequel: More Sequels and Licensed Games
The Result: Incorrect.
Although I could argue for it, this didn’t really happen. Sequel games were launched in 2013, but none were very successful. Instead we saw a different trend with gaming companies focusing on pumping out new content for their existing games.
3) The Mobile Dustbowl: Less Farming Games, More Hardcore and Gambling Games
The Result: Correct.
In 2014, we put down our pitchforks and started blasting zombies. Machine Zone’s successful title, Game of War launched in July and is being called “the 6th most lucrative game on iOS.” Countless other hardcore games are close behind and at the moment, five of the top twentyfive grossing apps on the App Store are casino games.
4) The Rise of True Multiplayer Games
The Result: Correct.
This one excites me, multiplayer is finally taking off on mobile! It’s not just strategy or role-playing games either, but casual games too. We’re seeing breakout successes from casual games like QuizUp and Leterpress that allow you to compete against your friends in real-time.
5) Windows 8 Woos Gamers
The Result: Correct.
With strong market share growth outside of the U.S., Windows Phone has risen in the eyes of leading mobile game developers. For example, just in time for the holidays, Temple Run 2 launched on Windows Phone.
6) Tablets Kill Consoles
The Result: Incorrect.
The initial sales figures coming in for PlayStation 4 and Xbox One have been strong. With that said, tablets outsold PCs for the first time this holiday season so keep an eye on this trend in 2014 as Apple will likely announce their play for the living room at WWDC.
1) Small Developers Will Rely Heavily on Publishers
The market is getting competitive and it’s getting harder and harder to self publish mobile games. Indie developers are going to continue to need bigger marketing budgets to compete and the easiest way to get it is through a publisher.
2) Subscription Billing Will Become More Pervasive.
We’re already seeing Kabam and Glu successfully sell in-app subscriptions on Google Play to stabilize the sale of virtual currency. Based on early figures on Google Play, look for more game developers to offer in-app subscriptions on the Apple App Store in 2014.
3) Your TV Will Be Connected
Apple will inevitably come out with something that connects games to your living room television in a big way. While it’s impossible to predict exactly how Apple will do this, their acquisition of Primesense, the company who helped Microsoft develop Xbox Kinect was a clear signal of what’s to come.
4) Games Will Serve Fresh Ad Formats
Large publishers like SEGA are testing new native ad formats in their flagship games as they take them free-to-play. In 2014, smaller indie developers will follow close behind, pushing the boundaries of what’s possible for mobile advertising.
5) The Lines Between Console and Mobile Gaming Will Blur
More and more console games are going to include the freemium-based business model in 2014. This will kick off a new trend in which console game developers will also launch games for mobile that aid the console experience.
6) Micro-Consoles Will Become Extinct
It was fun to watch projects like Ouya from start to finish on Kickstarter. There was a lot of hype in 2013 but after a few failed attempts to build great micro-consoles, this trend will completely fizzle out and die in 2014.
7) Two More Game Publishers Will Rake in More Than $1 Million a Day
In 2014, the gap will widen between the top grossing games on iOS. The US gaming market is big enough to support two more companies that make over $1 million a day and after a rough 2013, one of them is going to be Zynga so buy stock now. The second developer to rake in over $1 million a day in 2014 will be a smaller indie developer that isn’t currently on the radar.
8) Helsinki is the New Silicon Valley, But…
While Helsinki had a hell of a year, Chengdu is up next in 2014. There are more developer geniuses in Chengdu, China than in SOMA. Get ready for a few top games to surface from the game developers in Chengdu, China in 2014.
9) Wait on Wearables, They Aren’t Ready for Game Developers
There won’t be any meaningful game revenue generated from wearables in 2014, so don’t waste your time developing for them, yet. Google Glass and smart watches like the Pebble or Samsung’s Galaxy Gear are neat but they’re too experimental. Serious developers should focus on what’s going to keep their businesses afloat in 2014, not the latest tech trends. Bill Gates once said, “People often overestimate what will happen in the next two years and underestimate what will happen in ten.” Although Glu developed a game for Google Glass, I don’t see enough user adoption to provide game developers with meaningful revenue for another 3-5 years. Wearables will have their moment but it won’t come this year.
10) There Won’t Be Any Major IPOs
While rumors are flying all over the place about certain game developers going public, none of them will do it in 2014. I’m predicting zero large game developers will go public in 2014 because it didn’t work out well for any of the companies that filed in 2012 or 2013. The team at Supercell made the smart choice, selling a 51% stake to SoftBank and Gungho Online.
[Originally posted on Gamasutra November 6th 2013]
The iOS and Android app ecosystems will grow more crowded and competitive than ever in 2014, and developers need to keep an eye on upcoming trends for user acquisition, monetization and user retention if they want to stay afloat. After a year of reviewing industry conferences, panels, workshops, and fireside chats, with the most recent being GMIC, here are four key takeaways about the trends and best practices from 2013 that will support mobile developers into 2014 and beyond.
CPE, not CPI, is the future of user acquisition.
There is a lot of debate in the mobile app ecosystem about the benefits of cost-per-engagement (CPE) versus cost-per-install (CPI) pricing models. But attendees throughout mobile and gaming conferences this year were eager to know: which pricing model is better at acquiring users?
The answer: CPE. It’s more than just a method—it’s the future.
At NativeX, we found this out for ourselves when we tested how well a role-playing game on Google Play held onto new users when it was advertised through both models using our reward/incentive ad network. For context, we ran the test during the week when that game was featured on Google Play and gathered user retention data for that placement as well. At the end of that week, the app’s seven-day retention rate for users acquired through a reward-based CPI was 12.7 percent, while the rate from a reward CPE system was 19.2 percent. Surprisingly, the CPE pricing model also beat out users acquired through Google Play – only 15.8 percent of users who downloaded the app directly from the featured placement on the Play store stuck around for longer than a week.
New developers must encourage users to spend in-app currency sooner, not later.
It’s now well-established that freemium apps will continue to gain market share over paid alternatives in the coming year, so developers in all market sectors will need new ways of making a profit without charging download fees. During the GMIC “User Acquisition and Monetization 2.0” panel, Paltalk president and former OMGPOP executive Wilson Kriegel pointed out that new developers shouldn’t worry too much about monetization without first focusing on high user engagement and retention. His point is insightful – users won’t put up with irritating ads or spend real money until an app becomes a valuable part of their lives.
However, there are engaging, unobtrusive things developers can do very early on in their user retention cycles to clear the way for monetization as quickly as possible. One is getting their users to start using in-app currency as soon as possible. They will have to offer it to users for free in the beginning, of course, but the sooner users recognize the virtual currency’s value to their gameplay experience, the sooner they’ll be willing to buy more. This strategy works especially well for games because spending in-game currency is often a vital part of the game’s functionality.
Ad network mediation is promising, but not without fault.
Ad network mediation, in which developers use a mediation service to pick and choose ads from across multiple ad networks, has been touted as the way of the future for effective monetization. At GMIC, Wilson Kriegel argued that greater choice of ad networks gives developers access to more effective ads overall.
I agree that the mediation system shows promise, but while it’s certainly better than standard ad network integration, it’s not disruptively better.
Several years ago, we incorporated ad mediation into our platform at NativeX. We saw a slight increase in profitability for the partner developers who used that technology, but not a large enough increase to be significant or worth the effort. The eCPM figures we’ve seen from leading in-app ad publishers say the same thing.
The reason is that right now, typical ad networks all source their campaigns from the same pool of advertisers and campaigns. And since most of those ads use the same cut-and-paste formats, mediation doesn’t provide much more choice and flexibility than your average individual network. If the available ads are all distracting or forgettable, they’ll all see the same bad results.
For now, it makes for more sense to focus on developing ads that use innovative formatting to mesh seamlessly with apps and add value to the user experience. Once networks are able to provide diverse formats on a broader scale that are very persuasive, mediation will become more valuable.
For foreign markets, there’s no cookie cutter recipe for success.
Mobile ad solutions should be as diverse as the customers who use them. Different countries, and different market segments within those countries, will need individualized approaches in order to guarantee success. At the Monetization panel, ZQGame Inc. CEO Michael Zhang explained that developers hoping to expand into thriving mobile markets in Asia need to understand local use cases and key demographic profiles instead of relying on their previous experiences in the US.
In-app monetization provides one of many examples of these regional differences. In Japan, for example, in-app monetization is much more common than in America – partially because of the popularity of strategy and role-playing games, which lend themselves well to in-game purchases. For game developers hoping to expand in Japan, focusing monetization efforts on in-app advertising would be an inefficient and counterproductive strategy.
[Originally posted on BuzzFeed October 4th 2013]
At NativeX, my colleagues and I are always looking for fresh perspectives on the mobile advertising business. Sometimes these perspectives come from unexpected places. As a lifelong Vikings fan, I wasn’t sure how much wisdom I’d find in “The Score Takes Care of Itself,” the leadership manifesto by legendary San Francisco 49ers coach Bill Walsh. But the more I read, the more I similarities I saw between Walsh’s strategies and the strategies we’ve used to put NativeX at the forefront of innovation in native advertising.
Below are five winning business strategies based on tenets of Walsh’s philosophy.
“To Succeed, You Must Fail”
Innovation takes iteration. Most great businesses start with a great idea, but Walsh knew that even the best ideas need development and fine-tuning. Prepare to try out many different variants of an idea before finding a way to make it work. At NativeX, we never would have gotten into native advertising if we didn’t see for ourselves how standard banner ads flat-out don’t work.
“Be Obsessive in Looking For the Upside in the Downside“
Walsh’s famous West coast offense was born when he realized that though Cincinnati quarterback Virgil Carter couldn’t throw the ball deep like prototypical NFL quarterbacks, he could throw very accurately over short distances. Likewise, in business, supposed shortcomings can actually be clues about ways for you to set yourself apart from your competitors. This realization is often the outcome of the iteration and fine-tuning I mentioned in the first point.
“Control What You Can Control”
Walsh says 80 percent of football can be controlled. The other 20 percent comes down to referees’ decisions, bad bounces and so on. This is true in business as well, where politics, employees’ personal lives and even the weather can affect your business and your industry in ways you can’t predict or control. It’s important to think carefully about what aspects of your environment you actually exert influence over and focus your attention on them.
For the things you can’t control, recognize that you can at least make plans to keep yourself from getting caught flat-footed when they happen.
“Identify Problems that Need to be Solved, and Be Able to Solve Them”
Walsh recognized players that were negative influences on his team and took steps to remove them. Along the same lines, businesspeople need to be on the lookout for parts of their strategies or teams that aren’t working.
A big part of this is making sure you don’t fall into situations where you’re unable to make a necessary change even though you know it has to happen. This requires good planning and a lot of efficiency. At NativeX, even though we saw that native ad formats were yielding much higher results, most mobile ad networks didn’t allow for publisher based customization. It’s taken a lot of legwork and careful planning to get to a position where we’re able to build the ads we want to build without having to cave in to market pressure.
Walsh was constantly looking for ways to get a different perspective on his situation and outsmart physically dominant competitors. Along the same lines, in business, it’s important to keep looking for fresh perspectives that might show you opportunities other, bigger competitors are missing.
At NativeX, we put a lot of focus on ad mediation, but even after integrating with multiple ad networks, the ads weren’t working very well. When we finally surveyed the market, we found that other app developers using ad mediation were getting the same bad results. When we actually analyzed the overall picture, we saw that every ad network was running essentially the same types of ad campaigns. This allowed us to see ways for us set ourselves apart, like format innovation and targeted programmatic technology.
[Originally posted on Forbes September 16th 2013]
Google Play Developer Program Policies will be seeing some significant changes this week on September 20, 2013. Rob Weber, co-founder of NativeX, weighs in on a potential $150 million in ad revenue at stake and the impact on the Android market.
“In late August Google GOOG +0.02% announced that they would be changing their developer policies… It’s a bold, big move to catch up to iOS. The ad market has kind of been a grey area on Android,” says Weber. “Some ad networks have become very spammy because Google hasn’t been very stringent to this point. It was pretty much anything goes. This is a jump to improve the user experience and an attempt to catch up to Apple.”
The key aspects of these changes are designed to crack down on all manner of “spammy” ad networks, push notifications, and ads in the notification bar space. This will impact thousands of developers and could cause serious damage to companies reliant on these practices.