Despite the advances made in buying digital media, marketers face significant challenges in effectively identifying and targeting the inventory that is right for them and delivering ads that are relevant and timely to acquire additional users.  This becomes more complicated with the addition of mobile platforms.  The following is a short review of the state of search, display and mobile advertising as it pertains to application promotion.    

W3i asked 33 mobile application marketers and developers what type of advertising they used or tried (at least once). 

Search: Making Progress on Meeting the Demands of App Marketers
Although search garners the largest share of online ad dollars, it was not the most commonly tried form of app advertising in our survey due to innate limitations.

Google took the first step forward by allowing advertisers to target each mobile operating system independently and by carrier through keyword search.  Being able to target by mobile operating system is very valuable to app marketers who do not generally have their app available across all the different operating systems. My guess is that the carriers will be the power users of the carrier data rather than app marketers as they try to steal market share from each other.  There is still room for improvement.  Advertisers cannot target by type of device (think iPhone, iTouch, or iPad) or the version of the operating system. 

Google is also offering the option (although it is opt-out) to block advertisers’ ads from showing to users searching on mobile devices. This has the potential to improve the ROI for Internet marketers should mobile search become a large portion of Google’s search query volume.  Imagine a company promoting a desktop app paying for clicks that were generated on mobile devices that their app was not compatible with– it would be a complete waste of their advertising dollars.

Current desktop keyword search advertising is limiting for app marketers because none of the major search engines allow advertisers to target by desktop operating system, browser, or hardware specification.  Imagine a Firefox browser plug-in marketer purchasing non-browser-specific search keywords when 70% of the impressions are viewed by users with incompatible browsers or a marketer of a Mac app wasting 95% of its ad budget on non-Mac users.

Display: Closer to Meeting the Demands of App Marketers
Many would argue that display advertising is less mature than search, but with the advent of ad exchanges and real-time bidding marketers have more targeting variables to use when architecting their campaigns.  Variables like browser, operating system, and connection speed are just a few of the options that are available in addition to demographic, contextual, or behavioral attributes. For example, think of the value of knowing connection speed to an MMORPG company like Turbine who is looking to promote trial downloads for their extremely popular, free-to-play 2.8 gigabyte Dungeons & Dragons Online game.  Unless the user has a robust broadband connection, receiving the trial download digitally from Turbine is impractical. Web ad exchanges could improve performance by offering these variables within their reporting tools in addition to their bid targeting architecture in order to drive further value from targeting. 

Mobile Advertising:  What Targeting Is Currently Available
The two major players at this point are Quattro Wireless and AdMob.

Q Elevation is Quattro’s ad serving solution that optimizes every ad impression delivered to a user.  Publishers can drop in the Quattro SDK and start serving ads based on the audience parameters that they specify. Quattro then uses the content and nature of the publisher’s app to determine the most relevant ads to show to a particular user.

Advertisers can drive distribution by targeting by phone platform (Windows Mobile, Android, iPhone) so the app is targeted to the appropriate user.  In addition, an advertiser may want to retarget certain users or present ads from showing to users who already installed the app.

Quattro positions itself against Google as being a “premium” network, providing full transparency into the publishers within its network.  With Google and AdMob, an advertiser has no visibility into the sites or apps that they are advertising on.  Transparency, premium inventory, and optimization capabilities are what Quattro is choosing to focus on.

With the rise in mobile as an advertising platform, publishers are now facing similar challenges in mobile that they faced on the desktop internet.  Large publishers are hesitant to make their inventory available on exchanges because of their lack of control over pricing.  They want to charge the highest possible rate for what they consider to be premium inventory. 

AdMob has the ability to target bundles of apps by category, such as News and Entertainment.  On the mobile web, they have the ability to target by channel (Communities, Entertainment, etc).

With the announcement of iAd these platforms will continue to evolve as the market gets more sophisticated. 

The Future of Mobile Advertising- Apple iAd Promising More Emotion as well as Interactivity
On April 8^th Steve Jobs introduced improvements available in the iPhone 4.0 OS at the Apple Launch Event.  Jobs states that current “mobile advertising really sucks” so one of the major improvements is to make ads more interactive and emotional—combining the best of the Internet and TV.  This is accomplished through the iAd advertising platform.  iAd keeps consumers in the app not forcing them to open a browser.  Ads can take over the screen and offer the user multiple options—streamed videos, games, wallpaper, location-based info, etc.  Apple plans to have over 1 billion ad impressions by mid-summer if ads run every 10 minutes giving app marketers a new source of revenue (60% revenue split with Apple).  More entertainment opportunities for ads are great, but there remains the problem of relevancy and disruption.  No one knows what affect Apple’s entry into advertising will be; however, they will have access to a lot of behavioral and demographic data that could be a powerful asset in relevant advertising. 

More Relevancy and Less Disruption—Cross Promotion.
Cross-promotion should be considered as an advertising option.  Companies like AdMob for mobile apps and the W3i Application Network for desktop apps recommend relevant applications when consumers are in the installation mindset.  The way it works is analogous to displaying magazines or a pack of Trident in the checkout lane at the supermarket; as consumers are installing an app from various publishers, relevant applications are offered for their review.  This type of advertising is relatively low cost, low friction, and allows for rich targeting to meet the compatibility needs of the app.  For example Limbic Software used AdMob to cross-sell TowerMadness Zero on TapTap Revenge 3 to get them back into the Top 10 Strategy Game category in the AppStore.   Likewise with the W3i Application Network, Exent Technologies used Freeze.com Living 3D Dolphins ScreenSaver to cross-sell Exent’s http://www.freeridegames.com/ app.  Cross-selling is an effective distribution strategy as offers are presented in a trusted environment to consumers that have predisposition for similar products.

As more devices enter the market place and apps continue to proliferate, finding the most effective advertising platform will become paramount.  If you have any tips on successful app marketing, please leave them in the comments below.   

Rob Weber, Vice President of Business Development and Co-Founder, W3i, LLC
Rob is an Internet marketing pioneer with over ten, profitable years evolving W3i in the consumer application industry. 

If you didn’t get a chance to go to San Francisco, here are some of the Ad:Tech 2010  trendy topics that the W3i team picked up on:

Data Collection and Privacy Concerns:

• Data Collection – Nearly every speaker addressed the importance of data in targeting and optimizing.  In The Changing Business Landscape M&A overview, Gus Tai made a strong point that the companies that connect with the audience and know them intimately will win.   Quantcast’s Adam Gerber stated, “there are only two parts of the funnel that matter: the top (audience) and the bottom (conversion).”  Also for social advertising to become more of a brand marketer’s focus, brands need to move from measuring impressions to measuring engagement.   
• Interest Based Advertising  Icon – With 2/3 of online consumers concerned about privacy, IAB is rolling out interest based advertising, a self-regulated program that allows consumers to click on the icon shown with an online display ad and see how the ad was targeted to them.   This is in direct response to calls on the Internet ecosystem by the FTC to develop more robust and effective self-regulation of online behavioral-based advertising practices.

Mobile Marketing:

Advanced Mobile Marketing, Japanese-style:

• Due to 3G penetration and because most users pay for unlimited usage, Japan is a great testing ground for technical advancements in applications, including augmented reality.
• iButterfly, created by Mobile Art Lab,  is an augmented reality application that makes collecting coupons fun.  The app tasks its users with catching virtual butterflies, each representing one or more coupons.
• More social page views in Japan are mobile.  Mixi, Gree, and Mobagetown are the three largest social media sites in Japan.
• Coca-Cola Japan is designing their vending machines so that thirsty customers can use an embedded payment chip found in their cell phones to pay for their purchases, also enabling point-of-sale coupons.

Group Buying

With the success of Groupon.com, other group buying services are popping up.  Homerun.com is combining social, local, simple, and value into their group buying site.  The site encourages you to interface with Facebook and includes a loyalty program that rewards user invites and offer uses to accumulate cash-bonuses.  They are also leverage a psychological tactic of the exclusivity of “Private Reserve,”    a collection of exclusive high-end offers presented to most valued members. 

The W3i team enjoyed meeting with so many partners and networking at Ad:Tech SF.  Marketing with apps is thriving as engagement with the audience skyrockets.   We’d love to talk more about how to make your application business successful.

Rob Weber, Vice President of Business Development and Co-Founder, W3i, LLC
Rob is an Internet marketing pioneer with over ten, profitable years evolving W3i in the consumer application industry.

Ad:Tech San Francisco; a lively conference for online marketers looking to connect, share insights and do business.  I attended this year’s Ad:Tech as a first timer.  Throughout all the hustle and bustle, networking and meetings, I took the opportunity to take a breather and attend one of the expo’s floor presentations, App Exchange.  For me, this happened to be the most compelling hour of the show.  App Exchange gave app developers a platform to promote their mobile applications, showcasing innovation in app development.  While there were quite a few apps showcased, a few were doing some innovative stuff that caught my attention.

CauseWorld

CauseWorld (available for iPhone and Android) is an application that bridges the mobile and physical store worlds.  Users who download the app and participate gain karma points when they check into retail stores.  On top of that, they can use the app to locate and scan product barcodes within the store to gain additional karma.  Accrued karma points are donated to the cause of their choice, such as the LiveStrong Foundation or American Red Cross.  Incentivizing shopping with altruistic effects is nothing new, but the way CauseWorld does it certainly is.  Additionally, CauseWorld rewards users with achievements that can be shared with Facebook friends, creating stickiness to the service much like FourSquare and Gowalla do with their achievement systems.  With CauseWorld, everyone wins: users, causes, and businesses.

Wikitude

Augmented Reality (AR) is another innovation taking shape on mobile devices and Wikitude is leading the way.  Wikitude (available for iPhone, Android and Symbian) overlays reference information through the camera of the phone, allowing users to see points of interest in their surrounding area.  As quoted on the Wikitude site, Augmented Reality is identified as one of the top ten most disruptive new technologies for 2008-2012 by Gartner Research.  In March of this year, Wikitude laid the foundation for further innovation by releasing their iPhone API, allowing developers to build their own AR apps.

textPlus

While sending texts is a staple in nearly every mobile user’s diet, textPlus innovates by improving this experience, providing free, unlimited group texting across iPhone/iPod, iPad, Android, and Blackberry platforms.  This is what innovation is all about: taking an existing service and making it better.  textPlus has the numbers to back up their claims of success — over 6 million app downloads (they state the average app in the iTunes App Store has less than 100,000 downloads) with users averaging one hour of in-app use per day.  These are numbers not to be taken lightly.

Where do you see innovation in the mobile app landscape?  Are you an app developer that’s created something innovative and want to share your story?  Let us know your thoughts in the comments.

Eric Montag, Product Manager, W3i, LLC
Eric is a Pragmatic Marketing Certified Product Manager and uses his experience in internet marketing to lead the charge in product research, planning, and execution from both a consumer and business standpoint.  

Unless your last name begins with “Karim”, “Ronning”, or “Lawson”, et. al.  (Minnesota tech masters of the universe for those of you who need to brush up on your local tech lore) then you are going to need to prove yourself and tech start-up to would be early stage tech investors – aka “Angels”.

Part of proving your start-up is demonstrating the potential for a meaningful exit (what all investors deep down are looking for) by having a solid base of facts which can be used to establish the foundation of your early-stage company. The best way to come across as credible is to present key operating metrics, financial measures and milestones to prove you have what it takes to be a Minnesota tech superstar.

A few key recommendations on facts you should be prepare to show a potential investor which will dramatically improve your chances of scoring the early stage investment you are looking for:

Revenue Growth: In this market, it is highly unlikely anyone is going to invest seed capital in your tech business unless you can show a revenue growth curve that is trending up in a meaningful way. It isn’t so important that you are profitable yet, but early stage investors want to see proof in your ability to execute, and that customers are buying into whatever it is that you are selling.

Market Size: Many investors will pass on a deal if they see you have not done your diligence on the market you are entering. Investors are generally smart (although usually pretty clueless when it comes to being tactful) and they know that market size approximations are never going to be completely accurate. The point is you have some sense of what you are getting into.

Bottom-Up Financial Analysis: It is far better for an investor to see you are building a financial model from the ground up, using your key assumptions to build out a plan, versus top down. If you use some basic formula in a spreadsheet which shows linear growth, you probably don’t know what you are getting yourself into with your tech start-up.

Sizable User Base/Customer Base: For ad-supported web businesses, you’ll get much better terms if you give your pitch after you’ve already acquired your first 1,000,000 users and you are still showing a nice growth rate. For enterprise or retail tech businesses, you’ll want to be able to show a reasonable cluster of customers with steady (or even better, exponential) growth, and proven distribution channels. As a fellow Minnesota tech entrepreneur and mentor of mine once told me, “it’s all about distribution channels”.

Respected Board Advisors: Another key milestone which definitely establishes credibility for an early stage tech entrepreneur is having an outstanding set of board advisors. Many top-tier tech superstars are too busy with their own dreams to formally sit on your board, but many will volunteer to be a board advisor for you, allowing you to occasionally check in with them and leverage their professional networks. This is ideal when you are searching for the all important referral to angels. You will likely fail with angels if you are not working off referrals.

At Least One Partner: A very basic but important milestone… If you can’t convince at least one other entrepreneur to join your tech start-up, then what does that say?  If there was no Page, would there be a Brin in Google? Nope. Every great tech start-up had at least two founders.

Your Own Capital: Finally, show that you’ve put your own skin in the game. Investors want to see that you’ve mortgaged your house, worked two full-time jobs, and poured nearly all of your money (and your heart and soul) into your blossoming tech start-up. There are a lot of smart people in the tech industry, and being smart is not enough without tenacity.

Got any other key measures, metrics, or milestones to add? Post them in the comments!

Rob Weber is a co-founder of Minnesota headquartered W3i and a risk taker. Rob has been a private angel investor in a number of music, game, and mobile tech start-ups.

Amazon, along with all other book retailers and a variety of device manufacturers, are faced with a most disruptive competitive threat to their eBook business to date, the April 3 US release of Apple’s iPad.  Amazon is turning to app marketing to defend their competitive position.

Defending and Growing Their Core Business, Books–There’s an App for That

Amazon and other book retailers, like Barnes and Noble, are in the business of selling books, not selling devices.  Apple is in the business of selling devices, not selling books.  

Armed with this knowledge, Amazon has launched Kindle for the PC and Kindle for the iPhone.   Think of the Kindle for iPhone as a consumer’s “eBook store for iPhone/iPad” more so than Apple’s owned and operated e-Book store. This is a smart move by Amazon’s marketing team. Recent research conducted by W3i shows 50% of respondents indicate that they have an interest in using an application to aid in the discovery of books. Amazon introduced Kindle for iPad March 22, integrating with the Kindle bookstore and making more than 450,000 Kindle books available through its Kindle app.  Able to sync with Amazon’s servers, Kindle for iPad makes it possible for you to continue reading on a PC, Mac, iPhone, BlackBerry, or Kindle e-reader.   Amazon will continue to grow by knowing their strength, selling books, and making sure that their content is available in emerging platforms—like Apple’s iPad.  Barnes & Noble has already jumped on this bandwagon with the anticipated early April release of their eReader app for the iPad.  Other book retailers will be wise to follow suit and use app marketing to their advantage. 

It is important that app marketers consider what utility is provided by the apps they are developing and marketing. Amazon did a fantastic job with their PC and mobile apps versus their Kindle eReader. (I own a Kindle 2, and I rarely use it. When I am traveling, I’m much more likely to carry a pocket device like an iTouch, and when I am at home, I am much more likely to use my laptop PC.) I’ve used both the Kindle for PC and the Kindle for iPhone apps for a couple of months now, and I’ve found both to be very fast, easy to use, and well thought out. After I installed the Kindle for PC on my laptop, I tried out its “free sample” feature and skimmed through a few pages of Chris Anderson’s “Free” book, which is one of my all-time favorites. Unlike the Windows iTunes app by Apple where most of the navigation of content itself is within the app causing it to be very slow at times, most of Amazon’s desktop app is built by calling back to Amazon’s web technology while still managing the eBook files locally on my machine. This makes for a much faster, enjoyable experience. Next, I installed the Kindle for iPhone app on my iTouch. I purchased the book “The Quants” by Scott Patterson, and read it while on vacation with my family in Orlando. Amazon’s website, iPhone app, and PC app are all synchronized through their “Whispersync” technology. Kudos to Amazon for having a truly synced up, multi-channel strategy that creates great utility for its users.

Finding Alternative Distribution Channels-Mobile

Now that Amazon and other brands have very user-friendly mobile and PC apps, they need to find solutions to market their apps to the masses.  Last month, my Clickz column discussed a variety of ways marketers could find alternative distribution models for mobile, including rebates, free-for-a-day, free for virtual goods, and cross-promotion in app advertising. One example mentioned was the cross-promotion solutions provided by Tapjoy.  Tapjoy drove the Book Bazaar app to a top 10 position in the Books-Free(App) Category.  

How might Amazon push their Kindle for iPhone app more aggressively?

One of the most common distribution tactics used by top mobile app marketers is to get top ranking in the App Store.   As I read recently, “You don’t call Apple, they call you.”  I doubt Amazon will be getting a call from Apple to give them free publicity on the AppStore.  Amazon needs to use a variety of other consumer application marketing tactics: 

• Advertising – go old school with traditional advertising; an expensive tactic, but it can work.
• Download exchange – optimize ad campaign performance with mobile ad networks like Admob.
• Word of mouth – make it easy for friends to engage.
• Social buzz – expand your app’s horizons through viral market on existing social media such as blogs, Twitter, Youtube, and Facebook.  
• Review sites – get app ratings and reviews on sites like AppShopper, iUse This, AppVee, and Apple iPhone School.  Let positive reviews to do the work for  you.

Finding Alternative Distribution Channels-PC

One very effective application marketing tactic currently employed by Amazon is sponsored search.

However, there are limitations to search marketing; a major limitation being the lack of volume available in many new product categories. Amazon is also using In-house promotion tactics by heavily advertising new Amazon apps on their already highly trafficked and successful website.

How might Amazon push their Kindle for PC app more aggressively?

• PC OEM Deals – expand relationships with channel partners.  Ever heard the phrase, “enemies of your enemies are your friends” from Art of War? Most PC manufacturers are very concerned about the growth of Apple’s market share in the desktop and laptop market, the smartphone market, and now with iPad and Netbook sales. Even if the iPad is a smashing success, total unit sales are not going to come close to all other devices.
• Cross promotion- similar to Tapjoy in mobile, Amazon could contract with cross promotion companies like W3i.
• Affiliate marketing – Amazon is a pioneer in affiliate marketing.  If they are not already doing so, adding apps to their affiliate program could boost distribution.

Will Apple Block Amazon’s Apps?

No, there is too much risk from user outrage and potential unwanted attention by anti-trust government agencies.  Ultimately Amazon does not cannibalize Apple’s device sales but adds value.   

Strapping on the Amazon Marketing Armor

Amazon is making its content readily available on emerging platforms and in doing so is providing greater utility to its consumers.  Marketing their great new apps using cross-promotion,  search engine marketing, and other consumer app marketing tactics has Amazon well armed to fight the ensuing eBook battle.

If you observe any other Amazon app marketing tactics, or otherwise have a perspective, please post a comment.  We are always eager to learn from our valued readers. 

Rob Weber, Vice President of Business Development and Co-Founder, W3i, LLC
Rob is an Internet marketing pioneer with over ten, profitable years evolving W3i in the consumer application industry.

With the launch of the Apple iPad, W3i surveyed its consumers to see where in the product life cycle consumers were with eBooks.  Interestingly, 70% of respondents have never viewed an eBook; and 37% indicated that they did not even know what an eBook was while 32% said that they were just not interested.

Currently consumers say that they are more likely to view an eBook on their desktop or laptop (67%) with smartphone/iTouch coming in second (49%).  Only 15% indicate that they have an interest in an eReader. 

Of those that have read an eBook, 57% say that they currently use an eBook Reader (Kindle, Nook, etc.), and 37% say they might buy an eReader in the next year.

The library still tops the chart at 47% on where consumers currently discover new books followed by popular book sites (like Amazon, Barnes and Noble) at 27%, best seller lists at 27%, and family and friends at 27%.  Half of the respondents indicated an interest in a desktop application that stored their preferences, recommended books, and allowed them to order directly from their favorite web site.

In a recent Chicago Sun-Times article, a reviewer stated in reference to the iPad that “…it’s just such a bloody good book reader that some folks will never wander far from its eBook functions. And why not?  From one perspective, it’s hands-down the best book reader you can buy.”

An enthusiastic W3i employee/product manager who purchased his iPad this weekend stated, “The iPad is well worth its minimum $500 price tag.  It provides an effortless way to consume content that will likely revolutionize how we interact with computing devices for years to come.  The vivid, high-definition screen is a real attention-getter, providing additional real estate to interact with applications in new ways.  No regrets on this purchase here — I’m throwing out my laptop and replacing it with my iPad.”

If this is any indication, the iPad will change the world; but only time will tell.  As an avid reader, anything that makes it cool and easy to read again gets my thumbs up.

W3i surveyed 306 consumers from 3/1/2010 to 4/4/2010 – 54% female, 39% male with 7% declining to answer. 

Deborah Manthei, Director of Marketing Communications, W3i, LLC, evangelizing the use of consumer application marketing to engage brands’ essential users.