Messaging Apps: Growth And Monetization Trends For Mobile's Fastest-Growing Platforms

http://www.businessinsider.com/searching-for-the-next-whatsapp-in-mobile-messaging-2014-5

Over the past decade, as the mobile industry has grown to billions of users worldwide, messaging has risen to the top of the product heap. WhatsApp and other messaging services could become the next platforms to reach 1 billion users within a year or two. 

But it's more than just free instant messaging that's driving the boom. Really, it's more than even messaging. Like social networks before them, these apps are becoming the hubs for everything global smartphone audiences do on mobile. Messaging apps help people connect with one another, share photos, video chat, and, increasingly — play games, buy digital goods, and even shop offline. It has become a fiercely competitive space, into which Internet giants have poured billions of dollars (including Facebook's $19 billion acquisition of WhatsApp). 

A new report from BI Intelligence takes a deep dive into the messaging wars. The report contains our exclusive estimates for monthly active users for all the top global messaging platforms — including some like Snapchat and LINE, which do not release MAU numbers.

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We describe the similarities and differences between 15 messaging apps, include a case study of Japan-based LINE as an example of how this category can monetize and drive hundreds of millions of dollars in revenue. 

Here are some of the top insights on the mobile messaging wars: 

• With elegant distribution through mobile app stores and a simple foundation around the phone's address book, it's relatively easy for new messaging services to sprout and flourish.
• As network effects build, they can quickly amass tens or hundreds of millions of users and put up impressive growth rates. WhatsApp has over 500 million MAUs and LINE recently passed 400 million registered users (and some 229 million monthly active users, according to BI Intelligence estimates).
• Our data show that WeChat, LINE, WhatsApp, and Snapchat are all growing their user numbers in 2014 at a quarterly rate of 15% or higher.
• They also have huge engagement numbers: New Flurry data show that user sessions on social and messaging apps increased 203% in 2013, a faster leap than for any other app category.
• Messaging apps play a key role in cutting through the noise in the crowded world of mobile content and apps. They are gateways to content, games, communication and increasingly — offline activities. 
• Social messages are among the rare mobile push notifications that don't feel spammy and are likely to be among the first read every time they arrive. This is important for impression-based businesses such as advertising. 

Read more: http://www.businessinsider.com/searching-for-the-next-whatsapp-in-mobile-messaging-2014-5#ixzz31YQlwpvg

The Future Of Mobile Advertising Will Be Shaped By Two Trends

http://readwrite.com/2014/04/29/mobile-advertising-trends-future-programmatic-contextual#awesm=~oCQnBdETVOxrL4

Don Draper and his Mad Men would’ve looked at today’s technology and gawked.

“You mean I can reach anybody and everybody, anywhere and everywhere, with advertisements straight to their pockets?!" they would've asked. "Imagine the creative we can throw at that!”

The mobile revolution makes several promises, the first being that a powerful, connected computer will always be within arm’s reach nearly all the time. Mobile also promises instant access to information and the ability to communicate with just about anybody in any part of the world at a moment’s notice. It also promises a wealth of data about the people that use smartphones, and serve that information on a level that has no precedent. 

Quick Thoughts

Microsoft executive VP of devices Stephen Elop on Monday said the Android-based Nokia X would not be discontinued by Microsoft after the acquisition of Nokia was finalized. Elop, who was CEO of Nokia prior to the acquisition, said in a question-and-answer session on the Microsoft "Conversations" blog that the Nokia X is here to stay.

"Microsoft acquired the mobile phones business, inclusive of Nokia X, to help connect the next billion people to Microsoft's services," Elop wrote. "Nokia X uses the MSFT cloud, not Google's. This is a great opportunity to connect new customers to Skype,outlook.comand Onedrive for the first time. We've already seen tens of thousands of new subscribers on MSFT services."

Elop is reiterating what we have heard from both Nokia and Microsoft executives since the Nokia X was launched at Mobile World Congress in February. As ReadWrite predicted, the Nokia X is a vehicle for Microsoft to add more users to its cloud products and features, and the new "one" Microsoft sees value in the potential volume the Nokia X could bring. 

It’s no wonder why advertisers and marketers have been drooling over the concept of smartphones and ubiquitous computing for years. The opportunity to connect brands with consumers in a real-time, real-world environment seems like it should be an ample recipe to print money, just like Google did with Internet advertising more than a decade ago.

“We are still in the second inning,” said Ernie Cormier, CEO and president of mobile advertising exchange network Nexage. Cormier was talking about the process of building relevant advertising for mobile during a panel at a Massachusetts Innovation Technology Exchange last week.

The good news for Cormier is that he is part of two particular trends that are starting to define what mobile advertising and marketing is evolving into. Between programmatic advertising and contextual networks, the near-term future of mobile ads is beginning to take shape.

The Long Slog Fraught With Challenges

One of the reasons advertisers and marketers are having trouble creating the next big bang is because, from an advertising perspective, mobile is much different than the Web. Ubiquitous browser cookies are not available to follow people around and learn what they may or may not like. User attention is short, but frequent and spread between apps and browsers, maps and messaging; smartphone users check their phones up to 150 times per day, but often for seconds at a time.

The audience is fragmented and difficult to reach and no technology has yet been developed as a one-size-fits-all solution.

“Some of the basic assumptions need to be re-thought,” said Jeff Peden, founder and CEO of Crave Labs, a Boston-based mobile advertising startup. “There millions of applications across iOS and Android and many more mobile sites, so building a white-list of brand-approved apps and sites (which has been the norm in desktop display) and doing direct advertiser-publisher deals can be extremely limiting.  Today, we need to think about audience in terms of context: known or intuited characteristics about the consumer such as location, gender, interests and other demographic or psychograhic profiles.”

Dual Trend: Programmatic & Contextual

Advertisers are learning to build mobile campaigns based on two trends that fit well into the mobile marketplace: programmatic buying and selling of ads mixed with contextual, data-aware delivery. 

Programmatic ad buying is the use of software to automate the buying and selling of advertising inventory and is usually done through a network or platform like an exchange. On the Web, programmatic ad buying has long been associated with Google and real-time bidding networks where keywords are auctioned to the highest bidder through software. Programmatic advertising can also defined by the buying of impressions on apps or websites, known as “programmatic direct.” Buying can be triggered automatically through a predefined set of conditions in much the same way that stock trading is done.

Quote Of The Day: "Man is not the only animal who labors; but he is the only one who improves his workmanship." ~Abraham Lincoln

Contextual computing is easier to define, but harder to implement from a marketing and advertising point of view. Smartphones generate loads of data about their users—where they like to go, what they search for, who their friends are, what apps they use and what kinds of content they like to consume. For instance, my smartphone probably could’ve told you that I was in Washington, D.C. this weekend drinking a lot of wine and visiting museums and the zoo with a friend.

Together, contextual awareness and programmatic buying of ads will help companies target users on mobile apps and websites. For example, I could set up a campaign to target all smartphones in a certain geographic area that have certain demographic traits (like women 25-34 years old etc.) and deliver push notifications or advertisements to their devices and apps. The challenge is to bring marketing and advertising awareness down to the level of the street, in people’s pockets. Solving this problem is what mobile advertisers are tackling right now.

Companies like Nexage, PubMatic, OpenX and Twitter's MoPub are providing the programmatic exchanges advertisers are beginning to flock to, while companies like Adelphic Mobile (the foundation of Apple's iAd platform), Crave Labs, Celtra, Tapjoy, InMobi and Velti are providing the context and advertising to power those exchanges.

All of these companies have to battle the kings and queens of programmatic and context as Twitter, Google, Apple, Amazon and Microsoft chew up giant slices of the advertising pie. Dozens more companies worldwide are tackling the same issues, proving early Facebook employee Jeff Hammerbacher right when he said, "The best minds of my generation are thinking about how to make people click ads."

“We're in the early days of maturation, still, for mobile advertising," Peden said. "For the first time, we're beginning to see broader adoption of mobile advertising channels from brands—moving beyond the basic app—distribution ads that made up a majority of the market in the first years of mobile advertising."

ShowYou’s Channel Platform: A new way to make money from video on the iPad

http://venturebeat.com/2013/06/06/showyou-channels-launch/

Popular video discovery app ShowYou is stepping into new territory today: offering content creators a way to easily monetize their video streams within its apps.

That starts with re-framing how ShowYou approaches the videos you’re sharing on the service. Rather than just being a bunch of videos you like that people can view individually,  everything you share is now part of a channel that ShowYou users can sit back and enjoy like a television network.

On top of that, the company is launching the ShowYou Channel Platform, which lets anyone monetize channels made up of their own content. Rather than following a revenue share model like YouTube and Vimeo, the current leaders in online video, ShowYou is offering its platform as a software-as-a-service, so you’ll pay a monthly fee as well as additional fees depending on viewer numbers. The big benefit to that: You’ll get all of the ad revenues.

The platform’s pricing starts at just $5 a month for 100,000 views, and goes up to $400 a month for up to 10 million views. To let publishers test out the service, ShowYou is making the platform free for the next 90 days.

ShowYou will let you feed in content to your channel from just about anywhere — so you can easily pipe in video from your YouTube or Vimeo feeds, or directly from your own servers. ShowYou isn’t trying to compete directly with video giants; instead it’s positioning itself as the ideal way to let people browse their videos on the iPad.

“The app world is difficult — it’s hard to get your app distributed, it’s hard to keep viewers coming back, and it costs money to build,” said Mark Hall, ShowYou’s founder and chief executive, in an interview with VentureBeat.

Over the past few years, ShowYou has crafted its iPad app into one of the best video discovery solutions for the iPad, so it has plenty of allure for content producers. Its Channel Platform could be a tempting solution for publishers who haven’t figured out an iPad strategy yet — especially since it gives them the freedom to buy their own ads and sponsorships.

ShowYou is also offering a slew of tools to make its platform useful. You’ll be able to ‘promote’ videos into people’s feeds, similar to Twitter’s promoted tweets, add custom bumpers, and have access to analytics around your feed.

Hall tells me the idea for the Channels Platform started a few years ago when he was demonstrating the ShowYou app to publishers. While they were generally impressed, plenty of publishers were interested in a white-label version of ShowYou’s app for their own purposes.

“There’s an issue out there, where people want ShowYou’s capabilities, but they want more control,” Hall said. “[So we asked ourselves] how can we give them all the benefits of ShowYou with more control.”

San Francisco-based Remixation, ShowYou’s parent company, has raised an undisclosed amount of funding in a first round from True Ventures and other investors.

Below, check out a profile of one of ShowYou’s channel makers, Nick Douglas of Slacktory.

Read more at http://venturebeat.com/2013/06/06/showyou-channels-launch/#rYLbG7MRdVFA4hmZ.99 

Android’s market share is a ‘joke,’ and ‘Apple owns the high end’ of the smartphone market (interview)

http://venturebeat.com/2013/05/29/androids-market-share-is-a-joke-and-apple-owns-the-high-end-of-the-market/

Android’s market share is a joke, and most tech writers aren’t getting the punchline.

That, at least, is the opinion of John Kirk, a “recovering attorney,” financial adviser, business coach, and investor who wrote an interesting column recently stating that market share in general, and Android’s market share in particular, is not an appropriate measure of success.

And that contrary to all popular opinion, Apple is “winning the smartphone wars — and winning them handily.”

That’s not what you hear from most pundits, industry analysts, or Wall Street investors these days. Rather, the news is all about how Android has won, how its market share is massively outpacing Apple’s, and how Apple has failed by slowing innovation and refusing to release cheaper and more diversified iPhones.

I wanted to understand Kirk’s position, so yesterday we chatted about Apple, Google, Android, and Wall Street.

Source: John Koetsier

Android is open for business, apparently.

VentureBeat: You stated that Android’s market share is a joke. Why?

John Kirk: It’s a reference to the old joke that you can lose money on every sale but make it up in volume.

Many companies in the Android ecosystem are losing money or, at best, breaking even. HTC, Motorola, and many of the other phone manufacturers are in that boat.

VentureBeat: But isn’t profit a trailing indicator?

Kirk: Yes, it is.

But market share isn’t necessarily a leading indicator. Profit comes from a combination of market share times margins, and people are completely ignoring margins.

VentureBeat: That’s typically explained via platforms and ecosystems, and the network effects that a bigger platform has, and that the profits are coming — at some point.

Kirk: Different business models should be scored differently.

I’m talking almost exclusively about hardware manufacturers, which I think are poorly measured by market share and should be measured by profit share. If you’re looking at Apple and companies like Motorola, HTC, and Samsung from the manufacturer perspective, Apple is winning, Samsung is in second, and everyone is in a very distant third.

Source: John Koetsier

Android meets Wall-E.

Regarding platform, there’s an assumption that market share is the only thing that matters. And yet, all the evidence indicates that Apple’s iOS has a very strong platform, even with much, much smaller market share than Android.

The way the Android advocates explain this is to say that their theory is sound and that profit share must follow market share and that it’s going to happen any day now … but there’s no evidence that it actually is happening.

Saying that market share is the only thing that matters in platforms is like saying that acreage is the only thing that matters in real estate. Sure, the size of a property matters, but the location matters more. And sure, the size of market share matters, but the quality of the market share matters more.

In other words, Apple owns the high end of the market.

VentureBeat: One example that platform effects might be starting to impact iOS and Android is Google Music. Apple can’t seem to get a streaming music deal done, but Google was able to.

Kirk: Just because Apple hasn’t done it yet doesn’t mean they won’t do it. I think the music industry would much, much rather have Apple’s ecosystem than Android’s because that’s where the money is.

I’m not saying that Google Music won’t be OK, but it doesn’t impress me. It’s not necessarily another Google TV, but I don’t think it’ll be that big a deal.

Market share is like advertising … a huge audience is fine, but it’s much better to have a very focused, targeted audience.

VentureBeat: Are Google and Amazon wrong? They’re betting on the value of an ecosystem being a function of the value that flows through it — media, apps, books, ads, commerce — not just the value of the device it’s on.

Kirk: Google is playing a different game and wants to be scored differently … and it should be scored differently.

But Apple is winning in manufacturing … and that doesn’t mean that Google is losing in the advertising war. In fact they are winning, too — they’ve got exactly what they want.

It’s a mistake to think that Android is the only platform that matters to Google … in fact they’re spending a ton of resources on iOS apps as well.

VentureBeat: Leveraging a high profit share on a low market share is certainly efficient. But is it safe?

Kirk: There are two possible answers to that.

You can look at the PC wars versus the Mac, which everyone says that Apple lost … but what Apple “lost” by losing that war was winning 45 percent of the current market’s profits! So despite the fact that currently they’re at 8 percent market share, they’re doing very well.

Apple has historically demonstrated that they’ve been able to not just survive but thrive on limited market share.

I don’t think that history is repeating … it seems much more likely that we’re ending up with a duopoly rather than a monopoly, and that Apple’s ecosystem is large enough to be self-sustaining right now.

So what Apple needs to do is continue to add value to its ecosystem.

VentureBeat: If you’re right, why does Wall Street disagree with you?

Kirk: Wall Street had Apple valued at $700 last fall, and they have Apple valued at under $400 six months later.

So Wall Street was either wrong about Apple then, or they’re wrong about Apple now, or they were wrong both times. You shouldn’t judge the business value of a company by Wall Street’s variable estimates — you need to judge the fundamentals.

Frankly, if you’re investing in Wall Street, you need to be lucky as hell.

Image credit: Jesus Belzunce Gomez/Flickr

Read more at http://venturebeat.com/2013/05/29/androids-market-share-is-a-joke-and-apple-owns-the-high-end-of-the-market/#0V6ZWku8FdMC9krb.99