Wednesday, March 2, 2011
A bright future for mobile advertising in Japan
Japanese mobile advertising expects to grow from the current $328 million to over $1 billion by 2011. This growth is possible because of the cohesive nature of the mobile industry in Japan. Advertisers are not burdened with the problems associated with segmented carriers and divided services like in the USA. Instead, advertisers benefit from the uniform platform standards that allow their ads to be seen by all mobile consumers. Japanese mobile users are among the highest ad consumers in the world. 54% of Japanese mobile users consume ads and 44% actively click on mobile ad links. With the introduction of new and more sophisticated phone models, we can expect to see carriers and advertisers take advantage of the increase connection speeds, rich media and Flash presentation and 3G terminals to push highly interactive and better converting ads. Yahoo Inc. launched a mapping service that combines search with location based technology. Whenever a user enters a keyword into the Yahoo mobile search, advertisers registered with the Yahoo data pop up on a map that the user can easily click on for further information. Offline retailers are also tapping into the power of the mobile phone to help reach more consumers. Japanese TV spots regularly feature a short mobile URL on screen to allow the viewer to either order or seek more information about a product. Special mobile bar codes that can be scanned and read by almost any phone in Japan can be found printed on everything from Subway posters to name cards and magazine ads. Users simply scan the bar code and they are instantly connected to the advertisers mobile site without the need to manually input a URL. Advertising networks that target mobile users continue to enter the market in Japan. One of the fastest growing among mobile networks is Smart-C owned by Adways. Smart-C specializes in affiliate programs for the mobile platform, not unlike what Commission junction does for the Web in the States. Currently, Japan has over 80 affiliate network providers servicing both the web and mobile space. These providers allow any retailer to easily create and manage a mobile based advertising campaign while paying only for actual transactions and not just traffic. The mobile affiliate providers all offer sophisticated tracking and reporting features that rival what is found on many web based platforms. Japan is definitely the market to watch for mobile advertising and marketing trends.
Affiliate marketing – the new business model for mobile app developers?
The dominant business models for app developers at present are user payments or display advertising, however, affiliate marketing could be a new and potentially much more lucrative way of monetising many apps.
User-payment driven models can be very lucrative for hit applications, especially games. Howevever, there is increasing that application prices are suffering from downward pressure towards free. New types of payment models such as subscriptions or in-app payments are promising although not all application types are suited to these approaches.
Display advertising can pay the bills on free apps if there is sufficient scale of usage. Using ad networks like admob or potentially integrating mutliple ad networks using a mobile ad optimizer such as smaato or mobclix can deliver significant revenues for some apps. However, the growth in mobile inventory, and falling click-through rates mean that it is becoming harder to make this model work.
Affiliate marketing is an alternative revenue stream to user payments and display advertising that is just opening up on mobile phone and is creating a big opportunity for mobile app developers. Affiliate marketing is already a major category in the online advertising world and its now moving onto mobile. Unlike current mobile advertising which is typically sold on a CPM (cost per thousand) or more usually a CPC (cost per click) basis, mobile affiliate programs payout based on a CPA (cost per action) basis in a single payment or a revenue share. In some cases the payments for particular actions (e.g. in the mobile casino space) can be very high – up to $50 in some cases. As a result, with the right approach affiliate marketing can be more lucrative for mobile application developers than traditional mobile advertising or mobile payments from users.
A number of players are now offering affiliate programs for iphone apps including William Hill, Offerpal and Allslots/ Brightshare. In addition, the iphone appstore affiliate program run by linkshare has also been extended to work on mobile. Android-compatible affiliate programs are also emerging, taking advantage of the more open nature of the android appstore ecosystem . Developers on other platforms such as Java, Symbian, Blackberry and mobile web can typically choose from an even greater range of different mobile affiliate programs and networks.
There are also opportunities for application developers to use APIs from online shopping services to build affiliate-revenue driven apps. For example, apps could be developed for specific dietary requirements around online grocery APIs or to aggregate affiliate feeds from a range of retailers into a single app.
Another approach is to link mobile applications to the massive growth in vouchercodes. For example, the UK-based vouchercloud iphone app is a mobile-focused way of grabbing a slide of the discount voucher market. Whereas there is little room for new players on the web, vouchercloud has been able to build significant traction by being the first to market with a high quality voucher-driven iphone app.
Finally, the ability for mobile applications to interact with real world retail stores presents another affiliate marketing opportunity. Services like the shopsavvy iphone app allow users to scan a product barcode in a store and get pricing information from online suppliers. The affiliate potential of such applications is potentially enormous.
So – application developers need to look seriously at the opportunities presented by affiliate marketing, and consider this business model right from the intial concept stage in the design process.
User-payment driven models can be very lucrative for hit applications, especially games. Howevever, there is increasing that application prices are suffering from downward pressure towards free. New types of payment models such as subscriptions or in-app payments are promising although not all application types are suited to these approaches.
Display advertising can pay the bills on free apps if there is sufficient scale of usage. Using ad networks like admob or potentially integrating mutliple ad networks using a mobile ad optimizer such as smaato or mobclix can deliver significant revenues for some apps. However, the growth in mobile inventory, and falling click-through rates mean that it is becoming harder to make this model work.
Affiliate marketing is an alternative revenue stream to user payments and display advertising that is just opening up on mobile phone and is creating a big opportunity for mobile app developers. Affiliate marketing is already a major category in the online advertising world and its now moving onto mobile. Unlike current mobile advertising which is typically sold on a CPM (cost per thousand) or more usually a CPC (cost per click) basis, mobile affiliate programs payout based on a CPA (cost per action) basis in a single payment or a revenue share. In some cases the payments for particular actions (e.g. in the mobile casino space) can be very high – up to $50 in some cases. As a result, with the right approach affiliate marketing can be more lucrative for mobile application developers than traditional mobile advertising or mobile payments from users.
A number of players are now offering affiliate programs for iphone apps including William Hill, Offerpal and Allslots/ Brightshare. In addition, the iphone appstore affiliate program run by linkshare has also been extended to work on mobile. Android-compatible affiliate programs are also emerging, taking advantage of the more open nature of the android appstore ecosystem . Developers on other platforms such as Java, Symbian, Blackberry and mobile web can typically choose from an even greater range of different mobile affiliate programs and networks.
There are also opportunities for application developers to use APIs from online shopping services to build affiliate-revenue driven apps. For example, apps could be developed for specific dietary requirements around online grocery APIs or to aggregate affiliate feeds from a range of retailers into a single app.
Another approach is to link mobile applications to the massive growth in vouchercodes. For example, the UK-based vouchercloud iphone app is a mobile-focused way of grabbing a slide of the discount voucher market. Whereas there is little room for new players on the web, vouchercloud has been able to build significant traction by being the first to market with a high quality voucher-driven iphone app.
Finally, the ability for mobile applications to interact with real world retail stores presents another affiliate marketing opportunity. Services like the shopsavvy iphone app allow users to scan a product barcode in a store and get pricing information from online suppliers. The affiliate potential of such applications is potentially enormous.
So – application developers need to look seriously at the opportunities presented by affiliate marketing, and consider this business model right from the intial concept stage in the design process.
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