Recap of Mobile Monday Silicon Valley in San Francisco August 3, 2009

August 4, 2009 by Lisa Oshima | Advertising, Events, Financing, Mobile, Monetization

Last night, I attended the Mobile Monday Silicon Valley event at the Sir Francis Drake Hotel in San Francisco. There was a panel discussion on “Mobile Monetization,” which drew a large crowd, which seemed in direct proportion to the level of excitement around the topic of monetization.  The panel was moderated by Julie Ask, VP and Principal Analyst at Forrester, an the panelists were:

I had hoped to live tweet the event, but as is often the case when you get enough mobile geeks in a room, network connectivity wasn’t on my side.   I also discovered that Gravity, while ordinarily a fantastic app, didn’t handle the network connectivity issues well (i.e. it only queued 1 tweet at a time, and not for longer than a minute and a half… Sigh). So, I took notes the good old fashioned way – with a pen and paper – tweeting when technology permitted. Here are the most interesting tidbits from my notes*:

  • Andrew Lacy from Tapulous anticipates the in-app advertising opportunity to double and that virtual goods will prove itself soon.
  • When asked what platform he’d recommend developers create for, David Katz from Yahoo! Mobile said that Yahoo! tries to remain platform agnostic and that they’re trying not to make big bets on a specific platform. For developers today, Katz sees the biggest opportunity for iPhone and RIM… If developers have easy to create apps, it’s easier to spread themselves across multiple platforms.  However, given development costs, the richer the application, the more necessary it is for developers to place a bet.
  • Ali Diab from AdMob encouraged developers to think of mobile phones less as phones and more as computers when they develop.
  • Andrew Lacy said that when Tapulous was started, they decided that they wouldn’t build white-label apps for others, despite getting a lot of offers for development work from movie studios.  At the time, he saw movie studios excited to launch their own apps, but he thinks that’s changed a bit.  He’s seeing more movie studios and brands in general that want to integrate promotions for their film or product with existing applications that are successful like Tap Tap Revenge, rather than creating their own apps.
  • The panelists were asked how they decide to charge for apps and how they price their apps.
    • Andrew Lacy from Tapulous suggested developers consider the process they used, which is:
      • Launch the app at a specific price point (or free) and see how it performs and go from there
      • Run surveys to see what you can charge for
      • In the future, Tapulous is looking into bringing chargable digital content into their apps.
    • David Katz said that because Yahoo! is a web publisher as well as a mobile publisher, they look at mobile as a way to create loyal users, without looking at how much money mobile is generating.  They don’t charge for their apps right now because they look at mobile more as a way to create engagement with their users and to be on one more platform. If you’re not Yahoo! Mobile, it’s tough to decide if/what to charge and how to make money.  Katz talked about advertising and said, developers that are going to advertise need to decide:
      • What to advertise.
      • How to advertise – i.e. determine how rich the advertising experience will be and what form it will take. (Banner advertising is more valuable on mobile than web).
      • Can the app generate enough traffic to generate meaningful revenue?
  • An audience member asked what other forms of monetization developers should consider besides Ads and App store…
    • Andrew Lacy  from Tapulous said that he sees many iPhone apps in the ecosystem suffer 40% churn monthly, so it’s difficult for developers to calculate average cost of a user.  Developer should give users a reason to come back to their apps.  Developers should think of their mobile apps like they’d think of a website and keep up the content… Tapulous aims to “delight people on a daily basis and keep them coming back.”  In terms of alternate revenue sources, Lacy would look at:
      • Subscription content
      • Up-sell opportunities in-app
    • David Katz said he thinks that eventually developers that want to see ongoing success will need to pay an ad network to promote them/their app.
  • Patrick Mork from GetJar talked about how the world needs better search, indexing, etc. for mobile apps. The life cycle of apps is shortening.  GetJar is apparently seeing an average lifespan for an app of 3-4 weeks.
  • When discussing how app developers can become popular and keep up their growth momentum…
    • Lars Albright from Quattro believes developers already have the ability to use Ad networks to effectively grow their business.
    • Ali Diab said that Apps that are highly ranked stay highly ranked for a long time… He equated it as being a bit like Newton’s First Law: “An object at rest tends to stay at rest and an object in motion tends to stay in motion”
  • An audience member asked the panel why SMS, which is one of the most common ways to drive big revenue these days, hadn’t been mentioned.  Ali Diab said, “SMS is like the fax machine. It’ll be gone in 5 years.” At which point, the audience erupted in ‘booos’ of disapproval.  (On a personal note: I see Ali’s point, but I also agree with the audience… Just because SMS isn’t sexy and is old fashioned doesn’t meant that it won’t continue to generate revenue – especially in less sophisticated markets like the third world – and for that matter the US where some of the location based APIs Verizon mentioned at their developer conference last week would operate via SMS.)
  • An audience member asked how much of a mobile ad spend developers need to make to see results.
    • Ali Diab started off by joking that by investing ‘six figures’ developers would see an uplift.  When the audience gasped, he mentioned that $4-5,000 should generate a ‘serious uplift’ over a week or a few days.
    • Lars Albright agreed with Ali Diab, recommending that developers do an ad burst but make sure to reserve enough money to keep up the ads over a sustained period of time.
  • Someone in the audience asked if the panel thought that age segmentation would continue across handsets – i.e. iPhone users are younger than RIM who are younger than Nokia.
    • David Katz said he suspects this will change over time and that demographics will equalize across handsets as wider adoption of mobile technologies continue
  • Another audience member asked whether the panel thought developers should create native apps or web apps like Palm-Pre.  At that point, someone on the panel joked, “The what?” And, the whole audience erupted in laughter…
    • Patrick Mork says that they’re seeing both types of apps on GetJar.  He said developers will need to make the choice that’s right for them based on their product and service and what the customer expects.

At the end of the session, there were general announcements:

*I’ve tried to be as accurate as possible in my notes.  If you’re one of the panelists and feel I’ve misrepresented what you said in any way, please accept my apologies and email me so that I can edit this post accordingly.

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  • rizaayson

    Thanks for recapping this! Very interesting info– especially about SMS! I own a mobile marketing company called TextingForward and I am based in Los Angeles… how do I get a hold of the Mobile Monday events here?

    I enjoy your tweets too Lisa!

  • David Warner

    Large crowd would be something very common on this sort of show. It’s a nice blog. Media is a big support for the marketing process. It’s the new era. My concern here is for the iPhone that it’s about one of the biggest and finest in the mobile industry. And like many users I would like to see it go up.

    Nothing can replace the apps of iPhone. This is what makes s iPhone so great. And this sort of flexibility is hard to come by. Also the app, which is finding a good app is hard.

    Anyhow, I thought I would share with your readers about a site I found called: http://www.iphoneappcoder.com they helped me find the right iphone app developer and now I have 3 iPhone apps developed. What was more impressive is that all the people who contacted me were from the US and I could understand them well.






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