At 140 Proof, we talk to a lot of developers who are interested in learning more about how they might integrate our ads into their apps. Sometimes it’s immediately obvious when an app is a great fit for advertising, and sometimes it takes a bit more digging to figure out if ads will be a fit for both the developer and for us.
Because smartphone platforms are so flexible, developers have created many kinds of apps for consumers to use. Figuring out how to monetize these apps can be tricky. Most app business models can be distilled down to four types: ad-supported, freemium, subscription, and priced for sale in the app store.
Here, we’ll focus on how to know if your app is suited for advertising. When does it make sense for developers to choose an ad-supported model? In general, there are a few main characteristics of apps that do well with advertising. If you can answer yes to the following three questions about your app, you’re on the right track:
1. Is your app sticky? Put an ad on it.
For apps that inspire users to log in often, developers can make more money with a free app strategy than with paid apps because free apps pay out more over time. For each user, a developer can generate revenue repeatedly just by showing ads. News readers like Reader and news:yc are “heavy use” apps that would work well as ad-supported apps. Media creation apps like Camera+ and GarageBand, or music apps like Pandora and Spotify also fall into this category.
Consider that Pandora’s 2011 IPO filing revealed that Pandora makes 86% of monthly revenue from the ad-supported version of its popular music streaming app (available on the web, desktop, and in smartphones). People listen to Pandora for up to several hours a day.
While Facebook doesn’t offer a paid app version to its users, most of its revenue comes from advertising, too: about 85%.
2. Do users log in a lot? Put an ad on it.
Sometimes people don’t log into an app and stay connected for hours, but instead check in many times per day. This means you can show multiple ads per day to a user, even if your app gets used for only 30 seconds or a minute at a time.
Take social games like Scramble and WordFeud. People play for a minute at a time, up to dozens of times per day. Another example is social networks that allow users to “check into” their locations, like Foursquare and Facebook. These last two, of course, are huge global companies that generate the bulk of their revenues from advertising, but even small apps that gets users to “check in” regularly — like Highlight — are good candidates for ad-supported revenue models.
3. Can you segment your users into audiences? Put an ad on it.
One of the secrets of advertising is that advertisers buy audiences. Brands define their target audiences in multiple ways, including how old they are, where they live, what they buy, and what sites they visit. Technology has made it possible for brands to target highly-precise, specific demographic groups online, and the same sophistication is coming to mobile.
Advertisers will be eager to reach the audience that uses your app if a certain type of person tends to use it most often. For example, fashion apps and sports apps attract very different audiences, both highly valuable to certain advertisers. But even if you don’t have a vertical, niche-specific app, developers can segment users into different segments, packaging up these audiences for advertisers. There are a number of ways you can segment users into groups, such as by geography, device, and interests.
For example, a social reader app like Tweetbot or Echofon could segment its users into audiences by user location (listed in a social profile), by device (which OS the app is running on), and by trending topics (which content they post and share). An app like Yelp could segment users by city, types of restaurants they prefer, age and gender, and many other audiences. And, of course, vertical apps that cater to sports fans, fashion fanatics, new moms, car lovers, or any other group already have a targeted audience to offer advertisers, and can further segment users by location, gender, age, and preferences.
Identifying and segmenting audiences is tricky to do on your own, because you have to figure out how to show specific ads to specific segments. That’s why developers should work with mobile ad networks that aggregate the audiences of many apps for advertisers, rather than trying to sell ads on their own.
If you’re interested in learning more about whether your app can monetize successfully with advertising, contact us at firstname.lastname@example.org.
August 29, 2012 - 1 year ago
Targeting is critical to good advertising. While some mass-market products have appeal to a wide variety of people, most brands need to reach a subset of the general population with their message — that well-defined group that marketers call the target audience.
Online advertisers have historically used a couple ways to target their ads: putting ads on sites or apps that fit into verticals or showing ads to people based on browser history. But neither of these approaches fits the new, decentralized, content-driven nature of the internet. People visit social first and branch out from there, based on what friends and influencers recommend to them.
Interest graph targeting, on the other hand, transcends platform, uses public data, and can be applied everywhere. Interest graph targeting derives from public data in the social graph, and defines audiences based on interest signals like who people follow in social.
Advertisers can effectively build audiences in social advertising by aggregating the followers of influencers on particular topics. To help marketers understand how interest targeting can apply to upcoming campaigns, let’s take three big events coming this fall: the Emmy awards, automotive’s New Model Year, and the World Series.
Imagine that a CPG brand specializing in products for young children is sponsoring the Emmys as part of a push to attract moms and other household buyers. In this case, we would target both fans of retail influencers as well as moms. Taking cues from the Emmy nominees, marketers trying to reach moms watching the Emmys should target an audiences made up of followers of influencers like: @DowntonAbbey, @DANCEonFOX, @DancingABC, @girlsHBO, @nbc30Rock, @ModernFam, @BigBang_CBS, @EdieFalco, @NotTinaFey, @OfficialJLD, @MrJonCryer, @Alec_Baldwin, and @SofiaVergara, plus classic mom-friendly influencers like @ToysRUs, @ParentsMagazine, and @momfluential. By an extremely broad definition, up to 50 million people can be targeted with this combination of personas.
Auto New Model Year
September is prime time for automakers, as they launch new vehicles for the New Model Year (also known as MY 2013). To raise brand awareness and drive interest for potential buyers, automotive brands can use interest graph targeting to reach in-market vehicle shoppers in social. For a MY 2013 vehicle launch campaign, an automaker can reach the audiences of consideration-friendly news sources like @WSJautos, @AOLautos and enthusiast influencers like @Jalopnik. Automakers can also capitalize on the audiences of other automakers in social, using a conquest strategy to capture as many in-market shoppers as possible during the critical launch period.
Major League Baseball’s World Series
Interest graph targeting works for every vertical or type of event, but sports and social are an especially strong combination. Sports event broadcasters and other sports brands can aggregate World Series audiences with the followers of sports and baseball influencers like baseball journalists as well as the athletes themselves. To reach World Series fans with interest targeting, 140 Proof recommends building a strong audience with baseball leaders like @NickSwisher, @BrianWilson38, and @DavidOrtiz, journalists like @keithlaw, @JPosnanski, @BNightengale, and @Buster_ESPN, and broadcast brands like @ESPN and @SportsCenter.
Now you should have a better understanding of how interest graph targeting can be used to aggregate followers into audiences. Do you know of a brand facing a unique targeting challenge this fall, or do you have any questions about interest graph targeting? Let us know in the comments.
September 19, 2012 - 1 year ago
Since 2003, social advertising has grown and lately flourished, with 2012 its biggest year yet. The United States ad market overall grew by 4% in 2012, partly due to campaigns for political candidates and Olympics sponsors. And social giant Facebook recently reported a 32% increase in revenue for the third quarter of 2012. But how will social advertising shake out next year?
Experts predict that social advertising market growth will continue to climb to between $6 billion and $10 billion. In May 2012, BIA/Kelsey predicted that social ad spending in the US will top $5.9 billion for 2013, with social display taking the biggest portion. And last year, the marketing analysts at eMarketer predicted that the paid social market, including social ads, social network games, and social network applications, will earn $9.99 billion dollars in 2013.
Other signs point to a successful social ads industry for 2013, too.
Nielsen reports that almost 172 million people in the US accessed social networks in 2012, with 20% of online time being spent on social networks (more than any other online activity). Women spend the most time in social, up to 18 hours per month. And 30% of mobile time is now being spent on social media networks.
Because 140 Proof offers social advertising across many social platforms and uses public social data to target ads, we’re bullish on continued growth for 2013. With over half of the US population using social networks, social advertising is increasingly the best way to reach relevant audiences at scale. And brand advertisers increasingly prefer the Blended Interest Graph to reach these audiences, because social data is public and always up-to-date.
In January, we’ll be profiling the biggest social advertising trends of 2013. Stay tuned for more insights as the social ad industry grows and evolves.
December 4, 2012 - 1 year ago
Today, Erin Griffith at PandoDaily wrote about the need for mobile ad spend to catch up to the rest of digital spending.
We couldn’t agree more.
And with mobile internet use taking up an increasing piece of social media use (30% at last count), it’s time for brands to go where the audience is.
Mobile is certainly winning the attention war. Smartphone adoption is the fastest in history. Mobile devices are more popular than computers. Time spent on mobile is on track to outpace all other forms of media. And in many emerging markets, mobile is the only way users have ever encountered the Web.
December 5, 2012 - 1 year ago