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Loyalty & Retention

App Marketing Conversations: 2013 In Review

Ezra Siegel  //  January 20, 2014  //  8 min read

Mobile in 2013 – The rise of social messaging apps within an expanding app marketplace

In this installment of App Marketing Conversations we talked about things that have changed and what we have learned for mobile in 2013. Previously, mobile was all about gaming, but during 2013 the market expanded and people now use their phones for everything not just games and entertainment. One of the largest trends during 2013 was the rise of social messaging apps. App marketers need to be thinking about how to build these messaging services into a marketing plan.

Take a look at the video below as we dive into we have learned during 2013 and what has changed that will impact app marketers in the future.

Robi: Morning, and welcome to another App Marketing Conversations. I’m here with Ryan from GameHouse and Ian from MobileDevHQ and I’m Robi from Apptentive.
So, wrapping up this year, it’s nice and cold in most of the country. Surprisingly cold in Seattle, and as we look back on the year we thought we’d do a series of conversations about the things that have changed, the things we’ve learned.

So, I’m going to start it off by talking about a couple of the things that app marketers have sort of seen and grown into this year. One of the things that happened last year is we talked a lot about gaming. We were like “Gaming, gaming, gaming. Gaming leads the way in mobile.” This year it feels like mobile has become a much more full discussion about opportunities that are provided to people like travel, people who are in retail, people who are in mCommerce, maybe in traditionally eCommerce who have moved to mobile, what other markets have come up and what’s your take on how that market’s expanded this year?

Ryan: Yeah, so I think it’s a really interesting point that gaming essentially has kind of acted as a plow, right? It was like “Hey, you can do all these games and all this fun stuff on your phone,” which was kind of the easy way to break people in to using their phones for things other than the phone and text messaging, right? And slowly but surely as people got more comfortable, we found other uses, right, and other companies started providing you value that you couldn’t have gotten before.
So, I mean, I was just thinking about this the other day, like, how much more often than I use my iPad or iPhone and the apps that are on it for pretty much everything that I would have done on a PC previously, like, shopping, retail’s a big one.

Robi: Yep.

Ryan: Travel, sort of. I mean, you have to travel a lot to really get a lot of additional value there. So, I’m not sure what my overall point is other than over the last year we’ve really seen that kind of shift from “Hey, people are using phones for games and kind of entertainment” to “They’re using their phone and their tablet for kind of everything.”

Robi: Yep. Yep.

Ian: It’s true. Like, the point about games being a plow is interesting because it’s actually, like, games acted the way that porn traditionally acts, right?

Robi: Oh yeah.

Ian: Where porn brought VHS to the world.

Ryan: Yep.

Ian: Porn popularized the internet. Like, let’s be honest, right?

Robi: Right.

Ryan: Brought Bluray over.

Ian: Porn brought Bluray over HD-DVD.

Robi: Yep.

Ryan: Yep.

Ian: Right? But games brought mobile.

Ryan: Yep.

Ian: And I’m sure there is porn on mobile, like, no question, but especially on apps where Apple locks it down. Like, games took over that role.

Ryan: Yep.

Ian: And that was a really important role for it to take. Like-

Robi: Yep. Yep. That makes sense. And then in terms of thinking about some of the other things we’ve seen trend wise, I’ve been kind of blown away in the past few months about all the stats around the social messaging apps.

Ryan: Yep.

Robi: And the hook is that kids are using their phones constantly, and so we’re seeing the rise of instant messaging again, except the scale of instant messaging is far larger than it was the first time around when we had ICQ and AOL Instant Messenger.

Ryan: Yep.

Robi: And all those. Right? So what do you guys think? Does that pretend, you know, a reinvention of a lot of the things we saw 10 and 15 years ago?

Ian: Probably. How that looks, I don’t know. I think it was Benedict Evans who was talking about how messaging actually has the most potential to supplant Facebook, which is a really interesting way of looking at it, that, like, those guys are building up a different social graph that is potentially even more useful.

Robi: Right.

Ian: So, like, I think there’s a lot of potential in messaging. Messaging boggles my mind. Like, I only know how to use SMS. I don’t-

Ryan: Yep.

Ian: I don’t know, but-

Ryan: Yeah.

Robi: I’m sure you could figure out how to use WhatsApp.

Ian: I’m sure I could.

Ryan: Yeah. And I think its, because I was thinking about Benedict Evans’ point on this too where it’s like, you know, the messaging apps are going to become widgets very soon if they aren’t already, and then it ultimately relies upon the kind of platforms and services they build around those messaging apps.

But, you know, the phone is really interesting from a social networking perspective because your social graph is built in, right? It’s your phone book. And it wasn’t that way on the web. It’s certainly not that way with Facebook. Like, I have way more people in my contact list than I do friends on Facebook. Maybe that’s not true across the board, but I think the messaging apps, I would assume we’re going to see three winners and everything else will kind of slough off. That would be my guess. I don’t know how many more you can have.

Ian: Yeah.

Robi: Well, three winners in any given market.

Ryan: Yeah.

Robi: Like, in the US, right?

Ryan: Yeah.

Robi: So, but then if you look globally, there’s the potential that each market has its own three winners and maybe there’s some overlap but-

Ryan: Yeah.

Robi: It’s not required. And if you’re a marketer and you’re looking at things like Facebook and you’re starting to do marketing and advertising using Facebook, you’re starting to build communities there, and then you look at a What’sApp.

Ryan: Yep.

Robi: Do you start paying attention to that more? Does that get pulled into your strategy? How are you evaluating that next year?

Ryan: I think you have to be thinking about creating, you know, over the last two years, “What kind of social hooks can we build in? How can we build Facebook and Twitter in?” Now it’s got to be “How can we build these messaging services in and either provide some sort of incentive or reward or just making it really easy to share something with their friends via these social messaging apps?” because the scale’s so much larger.

Ian: That’s right. From a, I think from a paid standpoint, like, a lot of those guys haven’t figured out what that looks like and certainly haven’t figured out their targeting, but that’s where, like, we’ve talked about this before, set aside 10% of your budget for experiments.

Robi: Yeah.

Ian: And go experiment in some way around those guys.

Robi: Yeah.

Ryan: Yep.

Robi: So, definitely seen an expansion of all the markets, opportunities there. In fact, I was arguing with somebody last week that most of the value in the mobile market isn’t actually captured in the stereotypical industry reports because they talked about in app purchases, app purchases and advertising, and that misses a whole bunch of the commerce around a retailer or a travel site or even Uber. That was the point I made.
Right, so last week we saw Uber’s leaked results.

Ian: Yeah, geez.

Robi: Which is, like, they’re grossing about $1 billion each year. And then net to them, in terms of revenue, is probably $210 million.

Ryan: Yeah.

Robi: All that billion dollars is not captured in the industry reports around the size of mobile, right? That’s ridiculous, and that’s one company.

Ryan: Yeah.

Ian: Yep.

Robi: So, I think we’ve seen explosive growth. Another thing that we talked about last year, and I was banging the table when I said “2013, we’re going to be talking about retention a lot more,” and it feels like that’s definitely come up, but we’re still seeing so much explosive growth and expansion that retention is kind of a question coming up from the most seasoned marketers, but I’m not seeing it across the board.
Would you agree with that? How do you think about this Ryan?

Ryan: Yeah. So, I think retention starts to become more important as the market gets more and more saturated and we’ve got to be getting close to that point, right? I mean, I don’t know that we’re going to get there in the next year or so, but people are, you’re ultimately fighting for eyeballs and time and the cost of user acquisition continues to go up and it will continue to happen as long as the market can grow in conjunction with that.
So, it’s got to get, people need to be thinking about it now. Yeah. Not a very good point right there but…

Ian: But I totally agree. Like, it’s the right point of view. Retention and re-engagement have to become important at some point. It’s really just a matter of when people figure out that their budgets are, need to be focused in that direction and push notifications are not the answer to re-engagment. Right?
Like, they are, A, an answer that may or may not work. In many cases they don’t work. Yeah, and so there needs to be work done there to figure out better ways, more successful ways.

Ryan: Yeah. Oh yeah, and push notifications, I think, are an unfortunate victim of developers over use of them, right?

Robi: Yeah.

Ian: Yeah.

Ryan: Especially now that we’re seeing a bunch of system notifications, right?

Robi: Yeah.

Ryan: And so, like, that’s unfortunate because there can be a lot of value, right? Like, Starbucks push notifications are extremely valuable. Like, Apple Store notifications are really valuable, but so many of them are just, aren’t.
So I would say, you know, like, to your point, it’s one piece of an overarching puzzle. So yeah.

Robi: And the point about saturation’s an interesting one because, you know, part of me says “Okay, 2014. That’s when people are going to wake up and it’s really going to be a big deal,” but at the same time, going back to our good friend Benedict Evans and his predictions, right, he’s saying next year is the first time that mobile device says are really going to cross over PC ownership, and that’s actually interesting to think about.
When he put out that turn I was like “Wait, I thought that already happened,” but it hasn’t yet.

Ian: Yeah.

Robi: And so the fact that that’s just happening next year, I don’t know, maybe we are still, have sort of a lot of growth to go before we hit saturation globally at least.

Ryan: Yeah. I mean, I think, if I remember that chart correctly, it might have been a little bit unfair because it was like phone sales versus PC ownership, which is-

Robi: yeah, that’s true.

Ryan: Totally, like, two different things, because if you look at PC sales now, they’re kind of going like this. It goes, like, large. I mean, I’d like to see, like, what percentage of those home PCs are being used right now. I mean, just, like, think about your own experience. Like, other than doing some work at home, like, do you ever use your home computer?

Robi: Well, my home computer is my work computer.

Ryan: Okay.

Ian: Same for me, but, no, I also don’t use my tablet. I use my phone.

Ryan: Yeah.

Ian: For almost everything.

Robi: Yeah. Right, it’s certainly, like, the big, old desktop. I do have one and it hasn’t been plugged in in quite a while.

Ryan: Yeah.

Robi: So, that’s definitely gone. That counts in as numbers, right?

Ian: Yeah.

Ryan: Yeah. Well, I just think it’ll be, kind of my point there was it, phones have gone, or phones and tablets have gone, your point, from being games, to now being entertainment and retail, to now being total replacements for your home computer, and in a lot of cases, your work computer. And so the opportunities for developers and app marketers to capture that audience at various points during their day, whether it be on the bus, at work, or at home or with their kids, like, there’s a lot of opportunity there that simply didn’t exist before.

Robi: Yeah. That’s true. Creating time.

Ryan: Yeah.

Robi: Yeah. Anything else to add?

Ian: No, I think this is good.

Robi: Great Well, so be sure to turn in for the next segments of App Marketing Conversations where we review a couple other pieces of 2013. We’ll look back, and then next week we’ll be looking forward. Cheers.

About Ezra Siegel

Ezra is the VP of Community at Apptentive. He is a Chicago Sports Diehard and loves travel. Some day he would he plans to visit every country in the world. Connect with him on Twitter, LinkedIn, and Google+ .
View all posts by Ezra Siegel >

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