www.wipconnector.com@caaarlo#wipjam

The New App Economics

Working Across Borders andAcross Business Models

About WIP

• WIP Factory – www.wipfactory.com– Marketing and consulting agency specialized

in outreach to mobile developers– Customers include Nokia, Intel, GSM

Association, AT&T, Verizon, Deutsche Telekom, HTC, Immersion, Samsung

• WIP Connector – www.wipconnector.com – Mobile developer community of over 19,000– Global events, online resources and more

• Based in Vancouver, Canada with offices in Austin, Texas and London, UK

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Win a free pass to the event by tweeting us @wipjam or on Sina Weibo at carloWIP, with“I want to go to MWC with #wipjam”

The New App Economics

The Old App Economics

NNumber of downloads

× $0.70Revenue per

download

= TotalRevenue

Rise of the Freemium Model

Source: AppAnnie.com

The New App Economics

LTVLifetime Value

> CPACost per

acquisition

= Profit

What has changed in the equation?

• Lifetime value has increased over $0.70– In-app purchase/freemium model

• Paid acquisition– Ability to pay more for high-value users–Many more avenues for free acquisitions

• Distribution/download strategy– Drive free downloads– Convert free users to paying users

What has changed for developers?

• Marketing and business side has become more complex– Used to be one key metric: sales– Now: DAU/MAU; $/DAU or ARPDAU;

Retention Rates; LTV; $/download; CPA; Cross selling %

• Increased focus on user engagement as well as new user growth– Keeping users engaged – and paying – is

key– Less than 5% of users pay!

Who is good at this sort of thing?

• Big companies–Marketing experience and $$$– Big catalog for cross-promotion (free

CPA)

Challenges for Developers

Source: http://visualisations.visionmobile.com/

How to succeed in the new model

Step 1: Great Content

• Without a good underlying app, nothing will work

• Differentiation is crucial• Utilize more engaging factors– Haptics– Sound and video–What will make users keep coming back

for more?

Step 2: Business Model and App Design

• Premium vs. Freemium vs. Ad-Supported

• Match business model to your users and your app

• Design your app accordingly– For in-app purchases, add value to the

end user– New data sets, new levels, integration

with outside services– Pay to have more fun/more value, not

because you’re forced to

Step 3: Think Globally

• 70% of developers see most of their downloads coming from local markets

• Growth in new users is coming from Asia, LatAm, emerging markets

• Biggest pool of smartphone users is now likely in China

Step 3: Think Globally

Step 3: Think Globally

• Shortage of Local Language Apps

Step 4: Get the right partners

• Distribution and marketing–Who can help you reach the right users?– Operators, other developers, social

networks, paid acquisition networks

• Payments and purchasing– Reduce friction for the end user–Where are your users and how do they

pay?– Operator billing is crucial– 5-10x boost over other payment

methods

Step 4: Get the right partners

• Who has the customer relationships?• Who has the billing/business

relationships?• Who has the distribution channels?• Operators still key in many nations,

especially emerging markets– Billing infrastructure–Marketing support

Example: China Mobile

• No Google Play support in China– No paid apps– Not present on many Android devices– Local players dominate Android app

space

• China Mobile’s Mobile Market appstore – 160M+ users, >630M downloads– Carrier billing

Thank You!

Carlo LonginoDirector of Developer Marketing Services, WIP

carlo@wipconnector.comTwitter: @caaarloSina Weibo: carlowip

Slides will be posted at: http://www.slideshare.net/carloWIP/