Sramana Mitra: With that overview, can you double-click down on some of the trends in each of those vectors? Let’s take acquisitions. What are the key trends in mobile app customer acquisition right now?
Steve Wadsworth: In the early days, the focus of the publishers was to just acquire as many users as they could. They were going after volume and would think, “Let me see how many users I can get to download my app and I’ll figure out how to get value once I get the app on their phones.” It varies depending on where you are. I’m primarily talking about game publishers who are ahead of the curve in mobile app sophistication and value creation. That continues as a trend in that category, which is by far the biggest category of real engagement and monetization in mobile apps. However, you are seeing other apps emerge that are utilities or media apps. They would engage with sources like Tapjoy to drive volume of app installs.
As those publishers got more sophisticated, the trends are more and more about, “I’m now able to measure, to some degree, the value of a certain user. I want to improve the quality of the users I’m getting by being more targeted and more selective in how I get those users.” That’s a fairly key trend that’s been happening over the course of the last two years, particularly in the game category where those publishers are more sophisticated.
Sramana Mitra: The objective is to get the users who monetize better, obviously.
Steve Wadsworth: Exactly. As part of the sophistication of any app publisher, it’s to increasingly understand the value of a given user in an app and being able to very quickly measure that based on very limited amount of data. Maybe within a couple of days or two weeks of the user having an app. At that point, publishers can, based on the behavior, determine if this user is high-monetizing or low-monetizing. Then, manage that appropriately. Obviously, what they’re looking for are users that are going to be high-monetizing and so they will be selective about that user acquisition.
Sramana Mitra: In that first couple of minutes of the user engaging with the app, what are one or two examples that are indicative of somebody being a high-monetizing user?
Steve Wadsworth: It’s more like one or two weeks to get a read. The key things are frequency. How often is this user coming back? Engagement, meaning the depth of engagement in the app. How long is their session? Then of course, propensity to purchase something in the app. Most apps today are built in such a way that the opportunity to progress by purchasing something in the app comes up pretty early.
The publisher can get a read on that fairly early on that as well. Obviously, things like frequency, depth of engagement, how far they’ve gotten into the app with or without purchasing are determinants of how likely a user is to purchase.
Sramana Mitra: That becomes evident within a couple of weeks of the user engaging in the app?
Steve Wadsworth: In a week or two, that becomes pretty evident and it becomes more so over time.