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It’s time for a sustainable app revenue stream: moment marketing

This year, customers are taking greater control of their own movements than ever - using apps that will improve and augment their real-world journeys and experiences.

And they want to do this without clutter or compromise: in the arms race for audience attention, losses from mobile ad fraud are now likely in the billions and even higher for app-based businesses, and whilst in-app purchase (IAP) models present a more transparent way to generate revenue, only 5% of app users currently spend money in this way.

This means that although many apps are using a mixed revenue model of ad-based and IAP, what Forrester’s Julie Ask calls an ‘excessive cognitive load on the customermeans that experiences should be given greater focus, to avoid apps sinking further into the rabbit-hole of banner blindness, and even further into the graveyard of uninstalls.

It means that ambitious apps should look beyond selling premium ad packages; Video, Display or otherwise. It’s time to find another more sustainable source of value which takes greater care to address their user’s immediate wants and needs.

In this race to compete, what can apps in need of new and sustainable growth streams learn from the big  ‘attention merchants’ like Google, Facebook, Amazon, Baidu, and Tencent; as well as much-loved offline journey facilitators like AirBnB and Uber?

How can apps build new revenue models with the audiences they already have, to keep their community of users and advertisers loyal?

Getting more from the right moments

Let’s start with these data giants who capture our attention and fit into our daily lives by providing us with free information, entertainment, and services. Service-based monetization is a model which Elad Natanson touches on nicely here. It’s a way in which relevant features and content are brought together in new ways to create a two-way channel of value for apps and their users.

Consider a discount at your favorite restaurant when it’s lunchtime and you’re around the corner, a nudge to tell you that the out-of-stock shirt you wanted is waiting for you at your local store, or a reminder that you can collect cashback at the convenience store you stop at every day.

Unlike any attention merchants before them, these super apps understand that the real value lies in the richness and depth of their user data. This data is captured with our consent, as we come to rely on their in-the-moment services for finding holidays during our downtime, hunting down nearby high street deals or receiving train service updates during our daily commute.

As we well know, the audiences of these attention merchants aren’t the customer – they are the product.

Turning genuine moments of attention into greater user value

Moments are a resource both scarce and abundant: although users are perpetually glued to their phones, we get progressively more picky about how and where we spend our time. This means it’s important to build a deeper understanding of how we make the most of their attention, through offline behaviors. This lets apps in on hidden opportunities to create value for users, to generate value from users:

What does moment marketing mean in practice?

For users, this means delivering the right content and capability at the moment it’s most valuable

For advertisers, this means adding a deeper understanding of customer behavior to your package, making it worth significantly more.

With your current user-base as your greatest asset, packaging services for your advertisers based on demographics, or even in-app behavior, won’t cut it anymore.

Rather than creating campaigns which will reach your user-base of millennials, bargain-hunters or Barcelona-lovers, apps can use moments as a way to bridge the gap between characteristics and captive moments worthy of their attention. This makes it more likely that you’ll win their engagement with not only service they are likely to find personally useful, but also a service they can make use of right when they need it the most.

Moment-based service can help ambitious apps find their way into a bright future, by differentiating from the saturated ad space. By becoming purveyors of richer human understanding, businesses with apps can find a stable and sustainable triangle of value between their app, their existing user base, and their advertisers.

By defining your user base by not only the items they buy and the ads they click on, but also through the places they go, the time they spend and the habits they have – your app can quickly become a gateway to the kind of service which is rightly making a comeback after a decade of rapid digital transformation: service which complements rather than distracts from what’s happening in the real world.

Context marketing report 2018

REPORT:
How does context impact engagement?

How can you harness precious user moments to create customer opportunities and increase your app’s value?

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