Steve Wadsworth: What our analytics is able to do is watch the user behavior in the app, and based on that behavior assess very quickly which bucket a user falls into. We then use predictive analytics to classify users. We also have engagement tools in that same solution that will provide the publisher the opportunity to further engage any given segment and drive them to monetization either through advertising or in-app purchase. That’s where this ends up going. It’s sophisticated but the freemium model requires that as each user is going to behave slightly differently. You need a sophisticated modeling and analytics capability to understand the behavior of your users, put them in the appropriate segments, and then based on those segments, figure out how you want to engage them and how you want to drive monetization.
If you determine that this person is a free rider, you might start to introduce advertising. You might introduce a different kind of ad model where there’s less opt in. That is what our entire suite of capability is meant to do—maximize the value of any individual user in an app based on our understanding of their behavior and our monetization tools.
Sramana Mitra: You sound like your focus is largely on the gaming apps. Can you, however, comment at an industry level on what the trends are of the non-gaming apps? What particular categories of non-gaming apps are doing really well in the app world? What are the trends and dynamics of that part of the business?
Steve Wadsworth: First of all, our focus is on freemium media apps. That could be messaging, movie apps, health & fitness apps where it’s some kind of a service and has a premium value. Therefore, there’s a freemium model attached to it. We actually have quite a few apps in our ecosystem that are non-gaming apps.
Sramana Mitra: Let me rephrase the question a little bit by asking what are the other categories of non-gaming freemium apps that are seeing significant traction.
Steve Wadsworth: One category would be messaging and texting apps where there are premium components to it. To answer your question, the traction is driven by the user interest and the user-driven engagement. What I mean by that is the most popular app engagement category in mobile is games, outside maybe of social media. Social media might be first but that’s not a freemium model, so it’s not one that we’re necessarily focused on. Games is, by far, the largest category where people spend time on their mobile apps. That’s a consumer choice.
Then there’s a whole range of categories, but if you look at where people are spending their time, it’s in games. The other categories are just not getting as much user engagement but the model that we apply has the same impact. We might lift their revenue 30% to 40% right out of the gate before we get into the analytics part to optimize. That happens in any other app that we get integrated into, whether it’s a game app or not. It’s just that their total user base is not going to be as big because the user interest is primarily in games.