What are Sponsored Advertisements?

Sponsored advertisements are ads that are paid for by one party and presented by another.  Cost per click ads that appear on Google are one example of this type of advertisement.  Advertisers pay to get their message in front of a user and the user receives something of value, like Google Search (or other Google products), for free.  Sponsored ads that appear within free applications are another example of this type.  These advertisements support applications so they can be downloaded and used for free.

Sponsored Advertisements Get a Bad Rap

Advertising within applications is a vital component in keeping some applications free for download and use.  However, sponsored advertisements in free applications have gotten a bad rap and are wrongfully associated with invasive or negative behavior such as software that is unknowingly installed on a user’s computer solely to collect user information without their consent.  This association is incorrect, as sponsored ads, when properly presented, provide an excellent way of making consumers aware of products or services that may be of interest to them and, as stated earlier, support development of free applications that people want.

To maintain a great user experience, free applications with ads should always follow industry best practices which include:

• Ability to easily uninstall the application
• Displays unobtrusive advertisements within the application
• Does not collect personally identifiable information
• Does not monitor activities

W3i Goes Beyond Industry Best Practice Standards

W3i connects people to applications.  Users receive quality, free applications and are given other application recommendations during the installation process.  Some of our recommended apps utilize sponsored ads to pay for further development and to keep the app free.  To support this, W3i goes beyond industry best practices. W3i’s intelligent installation manager, InstallIQ, uninstalls itself after installing the selected applications, it only installs applications that the user selects and each application has a disclosure which includes its terms and conditions as well as any privacy policy.  In addition applications have instructions on how to uninstall and can be easily uninstalled through the Control Panel/Add and Remove.  InstallIQ never collects personally identifiable information. 

W3i is committed to user trust and credibility, which is why we are proud that InstallIQ is the only installation manager that is TRUSTe certified.  InstallIQ only recommends applications that meet standards for being tested for malware and spyware set forth by TRUSTe and W3i.  W3i tests and monitors all applications, even those that display sponsored advertisements, within the W3i Application Network to remain compliant to these stringent standards.

Sponsored advertisements, when used properly, help users receive free applications that provide value and, at the same time, support the application developer.  W3i’s Application Network proves that sponsored ads in apps do what they are intended to – give the user what they want for free.

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.  

There are many options available for building desktop applications; however, before you start there are three things you must consider. First, decide whether to build a cross-platform application or target a specific operating system. Next, choose the development tools to build your application. Finally, select an installation technology to deliver your application. Each of these decisions depends on a number of factors including your target audience, the type of application that you are building, and the distribution method that you plan to use.

In choosing a development tool, first consider the platforms (operating systems) on which your application must run. The top three operating systems are:  Windows, Mac and Linux. If you want your application to run on more than one of these, you should consider using tools that provide cross-platform capabilities, such as Eclipse, Flash and Adobe AIR. These types of tools can speed development and give you a larger audience. However, they can also add significant overhead in terms of distribution size, and may affect performance. Carefully examine the run-time requirements of the development tools you choose to determine the impact on the performance of your application and the ability to distribute it. Consider your distribution method—if users are downloading your application then size and dependence on additional components is a concern, whereas if you are going distribute your application on a CD or similar media, then size is generally of little concern. Also, review the run-time requirements of your development tool. You will most likely need to distribute extra software or require your users to download and install additional components. Some tools allow you to bundle these components with your application, but others may require a separate download from their site, which can complicate your installation process.

A more traditional approach to application development is to use a programming language such as C++, Pascal, or Java. This method requires a higher level of technical skill, and your application will not be as readily platform independent, although platform independence is still achievable. There are many development tools available, such as Visual Studio, C++Builder, and CodeWarrior. The advantage with traditional development is that you can make smaller applications that are less dependent on other software or components. If you are targeting a single platform and have the technical resources, this is a very good option for building desktop applications.

With traditional development there are many frameworks and code libraries available to help speed your development time. Frameworks provide a structure to build on while hiding much of the complexities of the operating system. Libraries add additional functionality and simplify common tasks such as parsing XML files or manipulating images. Frameworks and libraries are great for reducing your work, but take care in choosing them because they typically add significant size and may require additional run-time components. Also pay careful attention to code quality, especially when using open-source or third party offerings. Some popular frameworks include MFC and .NET (Visual Studio) and VCL (C++Builder). SourceForge is an excellent source for obtaining open-source frameworks and code libraries.

Installers are a very important part of building desktop applications. It is the first thing your users see, so it is important that it looks professional and works properly. There are many good tools available, such as InstallShield, Advanced Installer and NSIS. Most tools produce a self-running executable and some can also produce MSI files which use the Windows Installer technology. A typical installation program has a wizard to walk the user through the installation steps. The wizard starts with a Welcome screen which typically displays a description of the application and a EULA (end user license agreement). Next, optional items are presented, the installation begins, and a progress bar is shown.  Your application should also include an uninstall option, typically located under Control Panel – Add/Remove Programs. All of the major installation tools provide these functions automatically.

Software developers are always looking for ways to monetize their offerings, and because the current trend is to distribute applications for free, it can be difficult to generate revenue from your products. W3i’s InstallIQ technology can help you earn revenue from your distribution by offering additional products during your installation process. Implementation is simple—InstallIQ manages the wizard process and runs your installation along with any optional products the user has also selected. To use the InstallIQ wrapper, you need a silent version of your installer, which most install tools can do with a simple command-line switch so there is no extra work involved.

Building desktop applications can be a daunting task, but there are many tools and resources available to help with this effort. You must plan carefully and assess your needs to ensure that you choose the right tools and platforms. When you are ready to distribute, the W3i Application Network, featuring InstallIQ technology, is a great way to recoup your development costs, especially if you are offering your application for free.

Bill Zitomer, Software Development Team Lead, W3i, LLC
Bill uses his over twenty years experience to build W3i’s core desktop products as well as back-end technologies.

W3i Moves Data Center to Increase Security, Reliability, and Scalability for the W3i Application Network

ST. CLOUD, MINNESOTA, March 23, 2010 — The W3i Application Network is growing rapidly, averaging 9.6 million installs each month.  W3i made a strategic decision to move its data center to increase the level of security, reliability, and scalability of its operations.  W3i relocated its primary data center operations from St. Cloud, MN, to its new state-of-the-art, co-located facility in Chicago, IL. 

W3i’s data center operations are the “brains” behind its flagship product, InstallIQ, W3i’s proprietary installation manager.  Its data center is responsible for processing millions of daily requests from its installation client that determine what advertisements best match its user’s preferences.  Vice President of Information Systems, Jeff Bollinger explains the reasoning behind the move.  “Given the growth and increased strategic focus on delivering installs via W3i’s InstallIQ platform, the decision to move made sense for both the company and its partners.  Our St. Cloud data center was acceptable through our first ten years of growth, however, our new Chicago facility provides increased resiliency which is something we and our partners have grown to expect.” 

The new data center facility features Tier III construction standards which include distinct distribution paths, compartmentalization and concurrently maintainable infrastructure.  All of these features mean an increased level of reliability for W3i advertisers and publishers.  According to the Uptime Institute, facilities with Tier III type construction standards on average provide 99.98% site uptime per year.

Moving locations also gave W3i an opportunity to upgrade its core network and computing platforms.  The new data center features extensive virtualization technology in both computing (VMWare) and storage (Compellent Technologies).  The introduction of these new technologies has helped drive down capital and operating costs while at the same time increase the resiliency of our operations.  “The efficiency and flexibility that virtualization introduces is stunning,” states Bollinger.  “We’ve been able to reduce our physical server count by about 70%.” 

Virtualization is not new to W3i’s IT group.  A year ago W3i signed a deal with Seattle based SkyTap Inc. to provide cloud-based computing resources which enable a robust desktop testing platform for W3i’s Marketing Operations group.  “We are very pleased with the flexibility we see with our QA group using Skytap virtualization.  With the introduction of VMWare into our new Data Center we are now able to extend the success we saw with SkyTap into our core infrastructure operations,” says Bollinger. 

W3i’s Business Intelligence group is also excited about the new facility and architecture.  W3i’s publishers and advertisers benefit from W3i’s robust data warehouse platform which provides multi-dimensional reporting via W3i’s Associate Reporting portal.  “With our new computing and storage infrastructure we can decrease the amount of time it takes to process data, providing our associates with even more reliable delivery of information,”  comments Tim Laqua, Business Intelligence Team Lead at W3i.

The move ensures that W3i continues to deliver mass monetization and distribution opportunities to consumer application publishers and advertisers, now with even greater levels of service provided by its new Chicago facility.

About W3i

W3i, an application network that increases revenue, distribution and engagement for consumer applications and add-ons, enables publishers to provide quality consumer apps for free by recommending relevant applications during the installation process giving advertisers a mass, performance driven distribution channel.  The W3i Application Network uses InstallIQ, W3i’s proprietary Windows installation manager, the first installation manager to be certified in the TRUSTe Trusted Download Program.  Tested and optimized on over 350 million installs–currently over 9.6 million installs monthly and growing, W3i will prove to be a valued partner in growing your application business. To learn more, visit the W3i Application Network.

Contact:
Deborah Manthei
Director of Marketing Communications
320-257-7571
deborah.manthei@W3i.com

Software distribution is always a problem that publishers face.  Unless you have a loyal audience that you can market to within your app to gain further distribution, it’s becoming exceedingly difficult to get noticed across all platforms–desktop, browser, social and mobile.  Consider these numbers: currently, there are roughly 12,000 add-on’s in the Firefox add-on gallery (AMO).  In the Android Marketplace, at the end of December 2009, there were 20,000+ apps.  At the end of January, Apple’s App Store had a staggering 140,000+ third party apps available!  The number of desktop apps is in the millions.  Just imagine how these numbers will swell this year alone.  How does a publisher get distribution in a pool so massive? 

Here’s the problem: app stores are not built for software distribution for all publishers.  Only a select few are able to rocket to the tops of the charts and capture users’ attention.  These sites suit the aggregators well as they capture both the short and long tail, but what if you’re at the end of the long tail?  There are many ways to combat this; publishers need to seek more proactive ways to improve discoverability.  At the same time, publishers need to take advantage of solutions, such as W3i’s InstallIQ, that are built around distribution for all.  InstallIQ recommends relevant apps to users when they install comparable applications.  If you’re a publisher and have an app, it’s important to get face time with users.  W3i has nearly 10 years of experience connecting people to applications; that’s what makes us unique – that is our job and mission.  App stores are great for scale, great for the aggregator; but W3i can do what the app stores can’t: provide a software distribution solution that puts your application directly in front of users, out of all the clutter.

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.  

The blogosphere is covered with posts that would have us believe that desktop applications and software are already dead (cloud, mobile, SaaS); however, retail sales for desktop applications and software are a multi-billion dollar industry. In April 2009, the NPD Group reported that PC software retail sales were around $3.4B per year and holding steady. The major change, however, is the impact the web is having on how desktop applications and software are distributed.  According to NPD, web application and software distribution has increased from 11.5% to 17% in the last 4 years.

Following I explain how the web has influenced software bundling.  I start with a brief background of OEM software bundling.  Next I discuss a new type of software distribution that we call recommendation based distribution, and conclude with answers to frequently asked questions regarding recommendation based distribution.

Software Bundling

Software providers (OEM – original equipment manufacturer) for decades leveraged value-added resellers (VARs) for driving sales of their software as part of a hardware/software package.  These marketing partnerships result in what is often referred to as a “bundle” due to the fact that complementary services are bundled together.

A common example is a new computer that includes Microsoft Windows®.  A few other applications routinely bundled include Office®, security, internet browser, and toolbar applications. 

This type of distribution is big business.  Here are a few examples:

1. HP & WildTangent – WildTangent became an immediate force in the casual game world because of the huge bundle distribution agreements that they signed.
2. Storage devices bundled with back-up software such as Carbonite with Seagate and Memeo with Western Digital Technologies.

User acceptance over the practice varies based on the type of users a VAR sells to as well as the quality and quantity of applications that they bundle. The two primary concerns raised by consumers are system performance and the nuisance of removing unwanted software.

Recommendation Based Distribution

Is software bundling fundamentally flawed?  Do users want to receive a more affordable package by having additional software marketed to them?

Now that many users are connected to the web, software can be merchandised effectively without preloading on the users’ systems in advance.  W3i research showed that software bundling is not fundamentally flawed.  Users are however, most receptive to receiving software offers if they are involved in the application selection process.  Users can see recommendations for other applications when they first run a new computer, attach a new external device, or download an application from the web.  The recommendations can call out to the web to retrieve the files required for presenting the recommendations, downloading, and installing.

W3i to facilitate this process created its own proprietary technology, InstallIQ, which supports a fully web-capable solution allowing us to create a software distribution experience that resembles an online shopping experience. 

Here is an example of a website, Wallpapers.com, that runs InstallIQ during installation:

Note the consistency between the initial website and continued branding through the installation process.  We call this feature installer skinning.  By leveraging the website’s brand equity and style in the installer we create a transparent and consistent experience that enhances usability and increases conversions (see our post Creating Consistency to Increase Conversions).

The same flexible technology is used to improve the presentation of software to users:

Notice above that the user has a clear and consistent navigation experience.  This navigation style was influenced by a case study, published by TRUSTe, as well as improvements such as a shopping cart feature that was added based on user feedback.  The cart shows specifically what applications were accepted followed by a check-out process where the user can review all of their selected applications and change their selections before the process is completed. 

Some providers struggle with clear and consistent navigation because it is challenging working with their existing installation packaging technologies.  Their user navigation requires very different buttoning when a recommendation is presented. This is something I like to call “opt-irritating”.

In summary, the web is enabling an evolution in software distribution and software bundling.  It is so different from how VARs bundled in the past that we feel a more appropriate category descriptor, for this methodology is recommendation based distribution.

Frequently asked questions

• Is this business model right for my software?  How will my users respond?

Software with a low propensity for users to purchase have the most to gain. Frequently, developers are experimenting with multiple business models and a hybrid approach wins out. For example, a leading security application offers a free light version which gets heavy downloads, generates revenue from advertising using installer recommendations, and later pitches premium paid services to its users.

The response by users vary greatly from one implementation to another. A software or application provider’s reputation is highly influenced by the quality of software they provide. Distribute high quality software which is monetized through a high quality bundle experience and users can and will be very satisfied.

W3i has an experienced staff that works closely with software providers to define the solution which best suits their needs, including support on decisions such as the:  

• • Customizable look and feel
  • Select which, and how many, applications you want to recommend
  • Determine when you want to present the recommendations, whether it is with new installations or with special upgrades
  • Data-driven recommendations for optimization
• Who should I form a marketing partnership with?

Most consumers and developers are in agreement that security and trustworthiness are key when choosing a marketing partner.  Users’ trust is earned by providers who define, educate, and simplify the process so users can effectively take control.

There are a few techniques you might consider when selecting marketing partners.  How recognized are their brands? How useful is their software to your users? What comments, reviews, or ratings have been written about them? Ask your users what they think about the partner or think about how your user persona would most likely respond.  What commitment do they make in educating users about their practices and policies?  Do they have any third party validation and monitoring in place such as certification in the TRUSTe Trusted Download program?

Brands continue to play a key role.  Partners should stand behind their practices with full disclosure and branding.  They should proudly make visible who their marketing partners are instead of burying themselves in a privacy policy or by engineering their technology so it cannot be distinguished on its own.  Be cautious of providers with little or no reputation or experience.  If very few people say something positive or negative about them and they have significant distribution volumes, it says something about their commitment to creating awareness with their users.

• How many additional offers should I present in any single installation?

W3i conducted a test where 0, 1, 2, 3, 4, and 5 offers were tested.  The results showed that the quantity had a minimal impact and that the relevancy of the offers was more important.  Relevancy impacts whether the user will complete the installation of the software, keep and use the software, and whether they will accept offers.

Be sure to consider not only how many offers you distribute but whether or not you will allow the offers to include other offers in their updates or a subsequent run process.  W3i’s policy, which it enforces, prohibits advertisers from promoting additional offers.  Some companies say they only distribute one offer but they do not have policies against what their advertisers distribute and so in reality, users that accept a single offer actually end up getting pitched more than one offer, often within moments of downloading and installing.

As you can see online recommendation based distribution borrows from but also significantly enhances software bundling to make it more appealing to users. The solution continues to evolve but the basics laid out above are the foundation for successful online software distribution.

By mastering recommendation based distribution, your applications can leverage a proven model that enables you to be relevant through effective distribution and monetization.

Get more in-depth information about software or application distribution through W3i’s blog, newsletter, or reaching out to us directly.

Ryan Weber, Vice President of Corporate Strategy & Co-Founder, W3i, LLC
Entrepreneur and pioneer of Internet marketing focusing on increasing revenue and distribution for digital downloads.

As I was reading about the growing use of social media as a device for content discovery, a couple things became clear to me.  First, the article mentions social media as the next great gateway for users to discover stuff that is meaningful to them.  I agree.  Social media is a great vehicle to find information and content from people you trust.  But recent news of Twitter’s stalling growth, Facebook flattening and MySpace’s descent into a ghost town (ok, not so recent news there) lead me to believe that social media will not displace conventional means of content discovery, such as search, information portals, etc.  So let’s face it, discovery will continue to pervade multiple channels.  It also became clear that most of these discovery gateways are reactive, involving users seeking out said content.  In the long run, that’s not enough.  In order to maximize discovery, especially in regards to application discovery, one needs to employ a multi-pronged approach: one that is both proactive and reactive. 

First, let’s talk about reactive methods.  Enabling reactive methods of application discovery can be time-consuming and produce results slowly especially if you are just getting started (sure, there are rare exceptions to this rule).  For a publisher, it usually involves methods, like SEO, that are set to invite users to discover whatever their content may be, such as a new app.  Even social methods require users to find you and subsequently follow you, which is indeed a passive step that must be achieved before a social conversation can start.  It’s sort of like standing patiently at a mixer, waiting for people to just come up and chat with you because you look cool.  While that might produce some results, the best way for those to discover you is to get out, introduce yourself, and bump a few fists.

So let’s talk about proactive discovery.  An app with a great user experience, solving user problems without an active user base is worthless.  Publishers need to take a multi-pronged approach to improve discovery in order to build an engaged user base.  This includes standard reactive discovery gateways such as search and social, but also proactive methods that get your app in front of actual users saying “hello, nice to meet you”.  It dawned on me that W3i’s InstallIQ intuitively fit as a distinct proactive method to virtually shake hands (or fist bump) with users.  InstallIQ engages users on the install of an application; meaning that you have users’ undivided attention and have taken control over your discoverability destiny.  This proactive method is as equally important as reactive methods, but is one that is often lacking from marketing plans.   Proactive application discovery has less up-front investment (much like going up to someone and simply introducing yourself – no need to cultivate and hone your meta data for someone to spot you) and produces quicker results (hey, some of those people will introduce themselves back!).  The numbers don’t lie.  Within 8 months of launch, W3i’s InstallIQ helped a weather widget install a staggering 1.5 million apps.  Within 6 months of launch, a shopping widget gained an active audience of 3 million users via InstallIQ.  A proactive approach to application discovery can produce great results.

W3i offers a chance to proactively engage users and increase awareness, therefore, leaping over the difficult discoverability hurdle.  So how has your application discovery destiny played out?  Have you taken control of it?  How has it worked thus far?  Let your voice be heard 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. 

This evening I went online to BestBuy.com to pick up a new monitor for my home office PC. My old monitor crapped out a few days ago, and I’ve been meaning to get around to purchasing a new one. I tend to avoid brick and mortar stores for consumer electronic purchases, and BestBuy.com is usually the first website I start with when shopping for consumer electronics. (Apparently, I am like most other online shoppers… I read a recent analyst report that ranked BestBuy.com as the number one in total online consumer electronic sales.)

After using BestBuy.com’s user ratings to sort through and find the best-rated 23-inch monitor, I settled on an Acer H233Hbmid 23 inch Widescreen HD LCD Monitor listed at $209.99.

Thankfully for me, I use a couple of different browser add-ons which provide me with timely shopping related information while I am browsing the web. For this purchase, I followed through a message that came up from PriceGong (http://www.pricegong.com), which I had installed through W3i’s (http://www.W3i.com) Install IQ process a few months back. PriceGong alerted me that CompUSA.com had the exact same monitor for $199.99 with no shipping and handling, and no sales tax.

Later on, I proceeded through the checkout on BestBuy.com just to see what my final total would have been had I purchased this same monitor through BestBuy.com. With $14.99 for shipping and handling, and $16.37 sales tax, my total would have come to $241.35. I saved $41.36 because my installed application, PriceGong, recommended CompUSA.com while shopping at BestBuy.com!

Most tech bloggers talk down about any application that requires an install, such as Windows applications and hybrid applications (like the PriceGong browser add-on). Most tech bloggers are so caught up in the cloud these days that they fail to remember why operating system integration can be so useful. How can the cloud compete with the kind of timely information an installed application can provide?

Rob Weber, VP of Business Development and Co-Founder, W3i, LLC
Rob is an Internet marketing pioneer with over nine, profitable years evolving W3i in the Integrated Interactive Media industry.

W3i just wrapped up its first, of what will intently be annual, B2B Market Survey. We dubbed it the Application Distribution and Business Model Survey. Our goals were to improve our understanding of the Windows Application Market and its needs as well as broaden our understanding of how W3i can improve its services for both business partners and users.

I want to share three key insights gained from the survey. These insights are macro-level and, if instituted soundly, can provide consistent and copacetic results, fueling growth in the app market.

Insight #1: Know the Market Landscape

One thing is certain; the Windows Application Market is complex. Our survey added clarity into the diversity of verticals, needs, priorities, and anxieties that exist in this marketplace. It’s important to understand the landscape of the market(s) you’re in and to put that information to work. W3i has a unique vantage point in that we see the market across the entirety of application verticals (social networking, shopping, utilities, etc.), and we intend to use this information to better solve problems that uniquely impact the market.

Insight #2: Security and Trustworthiness Rule

Throughout the survey, respondents sent a clear message as to the importance of security and trustworthiness (see Figure 1). In every business partner and user interaction, these two values must be communicated with crystal clarity. Not only that, but your actions must match your words. W3i has a commitment to upholding a secure and trustworthy experience for users and partners. Our TRUSTe-certified InstallIQ is a perfect example of our testament to this.

Insight #3: Invest in Your Business Partners

We are humbled yet proud to have received high marks in the survey for our Business and Operational Support. Business Partner Satisfaction is one of our core corporate values — on a day-to-day basis our team works relentlessly to maximize growth and business partner relationships. Investing in a partner is truly an investment in the entire ecosystem – the entire market. Doing this acts as a direct conduit to improved user experience, improved campaign effectiveness and partner and user problems that get solved.

So there you have it. In sharing a few of the insights gained, our hope is that we can further drive innovation and growth in the Windows Application Market. Feel free to share your thoughts in the comments.

Eric Montag, Product Manager, W3i, LLCEric 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.

How to Avoid the Video Game Dead Pool

As the economy continues to slide, consumers are holding on to their money more tightly than ever. They want the entertainment value of online games but are reluctant to pay for it. This has put a tremendous strain on game publishers, who in the recent past have been compelled to explore ad-supported business models that offer games for free. This has helped minimize the risk of developing and marketing a game that ultimately ends up in the video game dead pool, but questions still remain whether meaningful money can be made.

The fact is, assuming that only around 2% of users convert to paying for a game following a free trial, then money is left on the table, because there are alternatives to the try-and-buy model for game marketing with which revenue can be earned from the other 98% of the traffic. These alternative business models for online games include: in-game ad model, ad-supported installer model, and the alternative-payment model.

In-game Advertising
Using computer and video games to deliver advertising is becoming an acceptable business model as big brands are testing it as a way to reach elusive markets. According to eMarketer, in-game advertising spending grew from $295 million in 2007 to $403 million in 2008—a growth rate of over 36%. By 2012, that figure should reach $650 million. Meanwhile, IGA Worldwide1 research shows that 82% of consumers feel the games are just as enjoyable with ads and 66% feel that the ads are not intrusive. Some of the top in-game advertising companies are:

1. Massive Incorporated
2. Double Fusion
3. JOGO Media
4. IGA Worldwide
5. NeoEdge Networks (casual games)

Although in-game advertising is growing, it can be difficult to execute and has a long payment cycle. For it to work, the creative must fit seamlessly with the game theme and not deter from gameplay. Additionally, users must spend considerable time playing the game for your ad revenue to build up.

Ad-Supported Installer Model
The W3i Application Network (AppNet) is a new revenue stream worth considering. AppNet is a network of companies with downloadable content—including downloadable games. A unique Windows installer, Install IQ (certified in the TRUSTe Trusted Download Program) is used during the installation process to offer the user a value-add of additional software—in categories like trialware, search, and e-commerce applications. AppNet requires minimal in-house resources, and you can start earning quickly once Install IQ is in place and new users install your games. Since users see ads only during the installation of your game, they have no interruption during gameplay. Additionally, since all of the revenue activity happens during the installation, the actual gameplay itself is not affected. For each qualified installation, the W3i partner receives from $.50 to $1.50.

Jenkat Games launched its downloadable game player in March 2009. With its success, Jenkat ramped up distribution, increasing install volume by 2,991% from its launch of individual game titles in January 2007. Malcolm Michaels, President of Jenkat Media, Inc., predicts that the company’s Jenkat Game Manager will grow to over 100,000 monthly installs by the end of 2009 fueled by W3i’s monetization capabilities. In addition, each game-manager install represents the opportunity to market and install multiple games, leading to millions of additional installations.

Alternative Payment Model
Companies like TrialPay (www.trialpay.com) offer a third option: the alternative-payment model. With TrialPay, a user can purchase your game or virtual currency by completing one advertising offer, such as subscribing to Netflix, buying jeans from Gap, or sending flowers from FTD. The advertiser pays for your game, which you then give to the user for free. Although the game is not technically “free” in this scenario inasmuch as the user must make another purchase in order to receive your game, it does represent another way to monetize those who might not otherwise pay to play your game. Playfish, one of the world’s largest and fastest growing social games companies, uses TrialPay to increase virtual currency sales. For example, in the weeks leading up to Valentine’s Day, Playfish let users get free virtual currency by sending flowers from FTD—and significantly increased sales.

Conclusion
Use creativity in your marketing plan by reviewing alternative business models. Many business models can be combined to give your bottom line an additional lift. For example, W3i’s Application Network can be layered onto other business models like trial and in-game advertising. Users respond to ads for “free” games. Why not put the power of free to work for your game while using an alternative revenue model to keep your company out of the dead pool?

Josh Fiedler, Business Development, W3i
Josh Fiedler is the Business Development Manager at W3i, a provider of integrated desktop and browser marketing solutions.  His expertise is in increasing revenue and traffic for downloadable games and utility software.

How are application installation rates impacted if multiple application ads are presented in the installer? This is a question that is frequently asked by application publishers when they consider the revenue- generating opportunity made possible by cross-selling additional applications during their installation process–the monetization model offered by the W3i Application Network. W3i conducted a test to attempt to answer this question.

First, some background information on W3i and the W3i Application Network. How does W3i add value? For advertisers W3i creates value by providing a new channel to purchase distribution. For publishers W3i creates value by sharing the revenue generated by the distribution of these advertisers’ applications. For users W3i creates value by helping them discover new applications from advertisers and providing revenue to fund more application development.

W3i conducted a test to understand the impact of cross-selling applications in the installer.

• Cross Section of Applications Tested – two media players, two game applications, a utility, and a social networking application.
• 175,000 applications were installed by users

The number of cross-sells (advertiser’s offers) tested included 1, 2, 3, 4, and 5.

Our findings show that a drop in the applications’ installation rate from 1 to 5 offers was less than 1.5 percentage points, equating to an average decrease of 12% with a full 5 offers. At W3i, publishers can choose the number of cross-sells that are available with their applications.

W3i observed that the acceptance rate of each cross-sell varies greatly from advertiser to advertiser and publisher to publisher. Additionally, applications have varying installation rates from application to application. This leads to the conclusion that it is not the quantity of cross-sells that impact the installation rate as much as it is the relevancy. W3i enables clients to select which applications to advertise with their apps to increase the relevancy for their users.

How many and what cross-sells are included is ultimately decided through balancing user acceptance and revenue generated. As the number of cross-sells increase, the relevancy and revenue decreases per cross-sell and so the reality is that there is limited number of cross-sells that maximize the lifetime revenue for a publisher.

Kristin Oberhaus, Product Manager, W3i Holdings, LLC
Kristin has over 13 years of product management experience and is a certified usability analyst. She is an avid believer in pragmatic marketing.