Mobile Internet Monetization Opportunities and Challenges

There are three assertions, where there should be no challenge: mobile is big, smartphones are big, and apps are big. Mobile is big all across the world and in India alone the mobile story is over 600 million connections. Smartphones worldwide have taken over PC sales. In the year 2015, tablet sales are expected to go past PC sales. The time spent on apps is rising and 46 billion app downloads are expected in 2012.

Mobile Internet monetization can be through mobile advertising, in-app purchases, virtual goods, and paid apps. One clear assertion is that most app users will be casual users (use apps to entertain themselves for some time), therefore mobile advertising and in-app purchase will be very important.

Another key assertion is that monetization strategies must be conceived from the very beginning. This is bit of a “yes” and a “no” – I have seen challenges in terms of adding advertisements or paid elements in a mobile product with great design and usability to begin with. But an initial focus on monetization can make things very tactical or shift focus from creating a great experience.

The first priority should be best usability/gaming/entertainment/utility experience for the user. The focus should be on creating a mobile product, which has the potential to be “loved” by the users.

From the mobile advertising perspective, I hear this a lot of times: “mobile screen is really small.” I think there is some truth in this.

In addition to this, there are other challenges like campaign tracking, fragmentation, lack of transparency, insights, and optimization. Another challenge that has been proven lately is that a certain percentage of all clicks on mobile are accidental and even fake clicks. But there is huge real inventory available on mobile and the time spent is real. We notice high CTRs for in-app advertising, where there is better engagement with the advertisements and ad sizes are also bigger, and ads are delivered in a creative manner using SDK and APIs.

One great example of advertisement solutions on mobile is advertising on Pandora, which offers solutions in terms of reach, demographics, interactivity, local impact, and purchase intent at the same time. It is adding up reach of print, benefits of terrestrial radio, and features of online interactivity. Now all this is possible through exchanges, publishers, and app developers. There is an amazing ecosystem of buying through RTB, which allows great targeting, and the newest buzz word – “programmatic marketing.”

There is another ecosystem of incentive-based actions, like app downloads or getting virtual goods. One great case in point is in-game advertising solutions offered in the popular game “THE SIMS.” It is a working model and there are various firms using these models.

There are more case studies and models, which I will be presenting on this topic in SES New Delhi 2012 and will share more on the same. Hope to see you there!

Related reading

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