So, it was 2008 when the mobile app download companies came into being in plenty, every second company I knew was a mobile ad-network. I wondered and thought what will be the state of the industry when all these companies who are offering VC money to be blown away in wasted advertising stop being clients who feed this new breed of so called ad-networks, sorry mobile ad-networks.
Every ecommerce company I knew, every mobile gaming company I knew, every utility based company I knew was wanting to share that all important first screen that was dramatically becoming smart phones in the growing Asia Pacific markets. China, India, Philippines, Australia, Korea, Hong Kong, Indonesia had all seen some crazy growth in smart phones and mobile internet penetration automatically paving way to the developer ecosystem to take a giant leap forward in the Android based apps development that had started to see massive deployment of various apps across the Google PlayStore in various categories for consumers to ensure their lives would become easy.
Easy it did become but the options of choice became huge, not anymore was convenience and ease of use was choice, it was what was cool that became the option for choice. It was the millennial crowd fueling the growth of the industry and not all convenience or not all ease of use products were considered cool and vice versa.
Now this meant that there was no loyalty and companies that were well funded were only interested in capturing the screen forgetting fundamentals of business and in the search of more consumers they let these mobile ad-networks go down various routes including incentivizing consumers to download. That was the beginning of the downfall, I knew then that the game is going to end soon simply because end of day like in any business, customer retention does take center stage and board meetings had started to become volatile with founders not able to explain as to where their story is headed because the reason for pumping money into down load campaigns were simple, more downloads means more customers and more customers means more transactions and more time spent, which inadvertently was not the case and the installed base was constantly declining.
Then there was this clear aspect of cohort numbers from 0-7, 7-15 and 15-30 days that became the clear point of focus for brands to focus on, which meant that it was important for the consumers to be engaged through various offers and interactions that drove consumers back to the app. These were done through notifications and it drive the consumers bonkers. They either deleted the app or shut notifications, both were harmful for the brand owners. Over time cohort numbers revealed a disastrous trend, 95% apps downloaded by consumers were normally deleted. This made life very difficult and come 2012 things had changed by now there were million dollar companies that went bankrupt in the mobile ad-network space, clients realized they were getting nothing out of these efforts, affiliate marketing stories through third party platforms for validations and analytics couldn’t scale so then came the new rules of business in the app download markets.
It now rested on not just installs but with registration, by the end of 2012 it had moved to searches on the various offerings meaning if it was a travel app then solution providers had to not just get the travel app downloaded but ensure consumers searched atleast once for some flight routes for example. In ecommerce, it went all the way to transactions, which meant that service providers not only had to download the app but ensure that the consumers transact. So, numbers started to fall dramatically and by 2014, it was becoming impossible to scale any business in that category.
It was bound to happen, each app is atleast 8 – 20MB in size and having such presence on a screen that could not accommodate that kind of storage meant that the phone performance deteriorated and automatically consumers would look for better solutions by deleting apps that were weakening the phone’s performance. Now this was commonsense but duh we live in the world of competition and forget that there are more races in the Olympics than just the 100-meter sprint.
Now brands decided to have teams in-house, they built large digital marketing teams to ensure they could continue the meteoric growth they had seen two years ago and thought they could do a better job than the service providers, in this case the ad-networks in the mobile space. But little did they know that it had nothing to do with the service providers but this whole business of pushing consumers to participate or engage with them was a flawed model. The old marketing slogan of building a pull brand was forgotten by the most well-funded companies and today they have realized what it takes to build a great brand that determines automatic consumer pull and they are all correcting their mistakes, which are now over 8 years old. It isn’t an easy process but work has begun, companies who supported these initiatives in the mobile ad-network have pivoted and there is a massive change that is happening in the whole mobile advertising space.
Today transparency has become the key in both mobile and desktop internet advertising, which was lacking big time. Therefore, programmatic is growing simply because it not just gives the power to the advertiser through various machine learning tools but also ensures legitimate price for the publisher eradicating any fraud that could potentially happen and bring the advertiser close to the publisher to discover the audiences who matter. Due to this, we have seen that programmatic and programmatic direct advertising is growing phenomenally globally and it is the same with mobile too. The industry has changed and it is time for everyone to wake up from their slumber to embrace programmatic mobile first solutions that enables audience discovery and rapid video advertising adoption than the downloads that were being forced on consumers.
Anyway, we are not only seeing consolidation in the commerce space but have come to terms with consumer first approach in all the businesses in the eco-system to deliver value that just occupy the screen.
RIP – Mobile Download Advertising!
Written by Rammohan Sundaram,Managing Director & Senior Vice President – APMEA C1X Inc