With 3.1m apps available in the Google Play (1.6m) and Apple (1.5m) app stores as of July 2015 (according to Statista), the issue of app discoverability has never been more challenging. More Statista stats reveal that no less than 50,750 apps and 19,130 games were launched in the iTunes app store in January 2016 alone.
Typically, the app marketer’s responses to this overwhelming level of competition is to spend big on mobile advertising app install campaigns, with Facebook, in particular, cleaning up in recent years owing to the strong performance of its app install ads.
But there is more than one way to skin a cat, and at Digital Turbine, the approach is to focus on the point at which the consumer buys a new handset. The company works with handset-makers and mobile operators to offer the consumer a curated set of apps to choose from as they activate their handset in store. As CEO Bill Stone puts it, it gives them an opportunity to capture some of the ad dollars they would not otherwise see.
The app economy
“These players selling hardware or data packages are not usually part of the growth in the app economy, so what we do is leverage the mobile’s homescreen and allow the players who control it to take part in the growth,” he says. “You have all these people every day buying a new, ‘naked’ phone or one that’s pre-populated with stuff they don’t need, like an iWatch app. What we’re trying to do is to connect the dots using the value of the beachfront property on the homescreen.”
To do so, Digital Turbine deals either with the handset-maker direct, in less developed countries, or in more developed regions, with the operator, who then issues the instruction to the handset maker as to which apps they want to pre-load on the handset to offer to the consumer. Either way, Digital Turbine shares the revenue it generates from the brands so keen to get their apps in front of the consumer, with either the handset-maker or the operator.
That revenue is based on one of two models. The first is a cost-per-install when there’s no sophisticated targeting other than location. Here, the app-owning brand agrees on a fee with Digital Turbine for everyone who installs the app and subsequently opens it. The second is cost-per-placement, where there is more targeting and the brand pays when the app in installed, whether it’s opened or not.
“With each operator we establish a set of rules for the types of campaign they are interested in running and the ones they are not,” says Stone. “Some are happy to present their customers with gambling apps, some are not. Some see Skype as competitive to their voice-calling revenues so we will carve these out and agree on what is inside the fence.”
Startup Wizard
From the consumer’s perspective, the Digital Turbine app recommendation platform manifests itself in one of three ways. The first is a Startup Wizard, where the consumer is taken through the set-up process, and as part of this, presented with a list of around 10-20 suggested apps that they may want to install. Typically these will include the principal social apps such as Facebook, Twitter and Instagram – SnapChat is the only leading social app Stone says the company has not engaged with to date – plus other popular apps such as streaming music apps, news updates, stock trackers and popular game apps.
The second way is what Stone calls the Dynamic Homescreen. This applies to Android handsets. Everyone who’s bought a new phone has turned it on and seen apps already on the homescreen upon the first boot. Digital Turbine modifies which apps are “preloaded” during the initial boot up in real time, based on some demographic and location information. This might mean a husband and wife will see different apps upon booting their phone for the first time. It also means someone in a city where ride sharing apps like Uber or Lyft are prevalent might see one of those apps recommended, whereas someone outside their operating area won’t.
An important distinction for Digital Turbine’s approach is the fact that the apps the company recommends can be removed. Many people have heard the term “bloatware” in reference to apps they don’t necessarily want on their phone. In fact, many of the preinstalled Google and Apple apps cannot be deleted. Digital Turbine makes it so consumers can keep the apps they like, and disregard (and delete) the ones they don’t, giving users greater control of the apps they want on their device.The third way is where the Digital Turbine platform is integrated within the operator/carrier’s app as an SDK in order to deliver app suggestions to the consumer from within the carrier’s app.
Interestingly, Digital Turbine works with, rather than against, some of the traditional mobile advertising players, counting WPP, Dentsu, M&C Saatchi, Twitter and InMobi among its partners. “We’ve established a marketing program where we become the media channel any agency can use to extend the media campaigns there are running to the handset,” says Stone. “They can target via gender, demographics and location, so two people who seem similar walking into a store in Austin and the other in New York would get different app suggestions, such as a different local newspaper app for example.”
Stone adds that the company is currently working with over 70 of the top 100 apps in the Google Play store and with more than 20 operators worldwide. “We have some competition from smaller companies,” he says. “But with our track record to date, we have the credibility with operators to integrate with them and do things their way, and that’s something some of the smaller players struggle with.”