Ad Learnings from Recipe Search

As part of YumYum Labs, earlier this summer, we built Recipe Search (top 10 app in the Android Health category). Yesterday, I shared on a panel at AppNation, some of our ad learnings that I thought would be useful to you:

– We did a quick and dirty test to see if users were willing to upgrade for the removal of ads. Our test wasn’t perfect – the user could pay whatever they wanted (1 cent or 1 dollar etc) and the billing workflow was processed through mobile Paypal as opposed to Android’s in-app billing (this test was done before that was available). The result was abysmal, some 10 users converted amongst 300-400K (at the time). Certainly, the result may have be better today with in-app billing but my conclusion is that the expected conversion is going to be low unless the ads become annoying assuming your users don’t abandon you (eg has anyone else noticed the increase in ads on Pandora!). Cathy Edwards with Chomp had suggested that our user base was self-selected and if we instead had made a separate paid app , we would have seen better conversion (since those would have been users willing to pay as opposed to those who only download free apps). Note, there was consensus that the iPhone seemed to have more users willing to pay versus Android and I’m curious if anyone has done any analysis as to why (besides number of cached CCs)?

– We saw significant variance in eCPM amongst different ad networks. You can never do enough A/B testing and it is absolutely one of the biggest ad monetization mistakes I’ve made with previous projects in my early days (eg ToneThis, TinyTube etc). Moving from 1 ad network to multiple ad networks instantly resulted in a 30-50% improvement. The reality is that eCPMs are not the same and either building your own or using third party mediators such as Nexage may be your best bet. In addition, make sure to test as many placements as you can. With TinyTube, for a very longtime, we didn’t put ads on the homepage because we thought it would upset the user. One day we decided to do so an instantly doubled our revenue with no increase in user attrition!

– We saw interesting eCPM variance depending on the time of the day and/or the week. I understand variance based on season (eg end of the month quotas or end of year spend etc) but to see variance through the day was interesting and I wonder if that was based on the algorithms ad networks used (eg serve high value inventory first with a ad spend cap for the day). Curious if anyone else has seen similar?

– Passing location certainly improved the eCPM but resulted in a different problem. Our users were getting upset to the point of not installing the app wondering why we were asking for location. Unless your app needs location (eg specific feature) which a Recipe Search app does not, than asking for location may result in user backlash.

– There was some discussion/debate about whether to have ads in the product from day 1. I’m of the opinion that it’s best to introduce it initially because no matter what you do, you are going to upset users. If you do it initially, it’s expected – if you introduce it later, you will definitely see some negative commentary! Jean Hsu with Pulse News mentioned that they had a paid app and than an ad-supported version of Pulse and users started commenting that if they (Pulse) introduce ads, they want their $1 back 🙂

– There is significant distinction between mobile web and in-app advertising. With mobile web, I’ve absolutely seen a significantly better eCPM for the top ad placement (eg top of the page) usually because the CTR is almost 2X of text/banners that are displayed in the body or footer of the page. With in-app advertising, I’ve seen fairly consistent CTRs regardless of placement (floating header or floating footer). This is important because you can design your app accordingly and then place the ad where it is most convenient.

– We touched on this briefly yesterday but there are various tricks we used to SEO/SEM. Everything from titling your application with keywords to titling the name of the company with the keyword as well (probably all good practices generally). Rob Coneybeer with Shasta Ventures had also mentioned the importance of the icon and real use cases with Smule’s applications as to how usage varied based on having a cool or crappy icon.

– Keyword versus categorical targeting – keyword targeting with mobile ad networks is mostly unavailable but categorical targeting is definitely there. Curious what others have experienced but we found that choosing all categories as opposed to the category you are most relevant to results in a higher eCPM since the ad network presumably than delivers the highest value ad across all the categories as opposed to just the one category. I imagine this is only temporary until we reach a point where the ads available become so large that the eCPM has effectively normalized (as opposed to the high variance we see today). Really the big question is how do you index the information inside of an app so we can do keyword targeting (especially if apps are the new web!)

Would love your feedback!

(BTW, link to an Intel blog post summarizing another panel I was on at AppNation)

CPA Advertising on Mobile

[Below was part of a post I had written for VisionMobile, a great group of awesome mobile analysts!]

Many point to Apple’s 2000M+ cached credit cards as being their most valuable asset. Why is it valuable, you may ask? Well, cached credit cards means one-click purchasing which is fantastic for all sorts of commerce (eg purchasing apps, physical goods and so forth). One less obvious benefit for cached CCs is how it enables CPA (Cost per action) advertising – let me explain. CPA ads typically require the user to complete some sort of form (eg completing a web form to trial some new product).The typical workflow requires providing billing and other details meaning numerous steps and clicks. However, if your billing details are cached, than the CPA workflow could be reduced to a few clicks!

Let’s walk thru an example of subscribing to Netflix. First, the user would click a text or banner ad for a Netflix trial subscription and is then taken to a landing page with specific product information about the service. The landing page is basically the sell page where you are going to make or break (convert) the CPA. Assuming you do a good job convincing your potential customer to sign-up for the trial, the user will complete a web form with his personal details (eg name, address etc) and billing information. The CPA has converted and the publisher serving the Netflix CPA ad just made his $25 bounty!

The challenge with the traditional CPA workflow on a mobile device is that your teaser page needs to be very concise given the limited real estate of a mobile screen. In addition the web application form needs to be easy to complete; we all know how difficult it is to type via a mobile keyboard.

One potential solution is the mobile wallet. If your billing details are cached, the web form could be auto-completed along with personal details resulting in almost a one-click CPA process and thus demonstrating the value of cached credit cards.

In the interim, clever stop-gap solutions have emerged. Instead of making the user complete a complex web form resulting in a poor CPA conversion, the user clicks-to-call a phone number from the teaser page. The call leads to a rep employed by the ad network who completes the web form for you (presumably at their PC). Companies like Moolah Media have demonstrated this workflow at great success and thus one solution enabling CPA advertising on mobile!

Update: I talked about a number of things we may see in the coming year at SXSW. Mike Merrill detailed some of my talk at his blog – thx Mike!