Insights on the Future of App Marketing with John Koetsier

really pumped to be here totally different conference experience than I've ever had before most conferences go to hundreds of people thousands of people tons of newbies tons of I got a free ticket so I'm here tons of you know whatever right really pumped that the ones I've talked to so far it's only about how few I'm going to hopefully spend some time with eight each of you in the next day and a half or so are serious people serious developers serious app marketers cool people who know what they're doing and are I know how much they don't know too because we are holy mother everything's changing all the time it's hard to know what the heck is going on I'm going to talk a little bit about insights on the future of app marketing and I was going to say well I hope everybody's going to be awake after lunch but thank you so much color switch guys I'm guessing by the shirts you woke us up and I appreciate

it very much it woke me up - that's awesome so who is this man Jeff Bezos awesome excellent who here has read the Jeff Bezos day one letter to shareholders who hears heard of the day one there we go awesome cool so if you want a cheap MBA here's the here's a hint go get all of his letters to shareholders to the one a year and read them all it'll cost you almost nothing except for sometime and you'll probably have a much better education than somebody who went and actually did an MBA hope there are no MBAs in the room when I just said that but hopefully that's fine so for twenty years Jeff Bezos has been saying inside Amazon and this is the the focus of his letter it's day one for 20 years even saying that it's day one for for e-commerce it's day one for m-commerce mobile commerce day one for AI is day one for cloud technology and all that sort of stuff he got a question recently by that he means it's early stages

there's lots to come it's all changing you got a question recently and the question was Jeff when is it day to better watch out here I'm going to trip and fall I'm sure of it but at least it'd be funny on the on the out page what is it going to look like on day two when is it day two and this was his answer you can't read all the day to a stasis followed by irrelevant excruciatingly painful decline followed by death and that is why it is always day one so his point is it's always day one there's always lots we can learn there's a lot we can learn from Amazon sure it's a massive four hundred thirty billion dollar company it's an enterprise company now also 700 million mobile users we there's a lot we can learn from what they're doing and there's a lot of lessons about not going to day two as I bring up Pokemon go there's a lot of lessons we can learn from the rise and the fall of Pokemon go

and I realize it's not completely fallen and there's things that are going to happen in the future and they're releasing new product all the time and everything like that but there's a lot we can learn because it's not where it was and because of where it got to first one perhaps is the speed of the mobile ecosystem there is no other ecosystem that has ever been created on the plan in the history of the human race that matches a speed of what we've done on the App Store and Google Play unbelievable incredible how quickly it rose there was one month in 2016 when Pokemon go had more usage per day in terms of time and Facebook and Twitter and Instagram and snapchat and tinder combined combined that's mind-blowing and amazing the second lesson is that it's very disruptive the ecosystem is very disruptive and you can be on top one day and you're down low the next day and today Pokemon go shirts around it's

still making money it still got users but it's nowhere near what it could have been or near what it what it maybe should have been if they had been ready to release more product if they had had a product that could work when it was a rainy day didn't why I walk outside if they had ready to being ready to release maybe gyms that you could teleport into and fight even though you were in Miami and the one you wanted to fight in was in New York or something like that right maybe the biggest lesson though is that it's really really hard to get back to day one when you're on day two really really challenging there's not a lot of examples of companies have done that Apple's probably done that Apple probably went to day two they probably came back they want some of us might argue that they're in day two again we're seeing a cycle there that's possible Microsoft is probably going back to day one as well and that's quite

interesting and amazing right so what we like to think that we're at the forefront of change that we're at forefront of technology we understand what's going on with you what's going on and we are in a lot of cases but in every wave of Technology it's interesting how much the next wave just crashes right over top of that one and the leaders of one wave get swallowed up by the next one so in the spirit of day one I want to share just some of the things that I've seen recently in my research so I'm going to talk about marketing is the new ASO we're in talk about ratings our cable stakes we're talking about app install fraud and ad fraud I give you the actual numbers from actual marketing campaigns and a lot of them we're going to talk about enterprise and how Enterprise is starting to catch up and we talk about how everything is going to change all over again so this is me john kassir currently with tuned as a mobile

economist mostly with some other companies as well I write for Forbes business insider TechCrunch a little bit ventureBeat still a little bit as well most of our audience for Forbes right now and I've built venture breeds research division which is mostly focused on mark tech and mobile so yeah tune the key facts that you need to take away from this one is that our tech is in three and a half billion devices my job at toon is to understand some of that stuff some of the data coming in from those devices and then share it and that's what I'm doing right here so marketing is a new ASO interesting everybody who's in apps and marketing realizes that search is critical Apple has said that search precedes about 65% of app downloads app installs Microsoft Google has said that quality app installs 83% of them are as a result of a search so search is absolutely critical what are the search terms that are being used interestingly

just ran a research study haven't even published all the the things we found there 100 percent of the top 10 keywords top 10 keywords by volume and the iOS apps are branded 90% of top 50 a six percent of the top hundred this could be challenging if you're not a brand in addition most of those keywords are owned by large companies and large startups 100% of the top 10 and top 25 86% or 88 percent of the top 50 as well again not a problem that's a problem if you're not big right it's kind of interesting to actually get 88% on the top 50 I had to take some companies out and it's a start-up sure but it has 70 million dollars in VC and it has about a 400 billion dollar mark market cap so many of those top keywords are owned by large large companies and huge start to implications of that one you're going to have to pay more because search is challenging and so ASO is challenging you're going to have to buy more ads and

buy more users that way second thing is that App Store optimization app marketing used to be such a niche and and unlike a lot about other things that go on in marketing such a core set of techniques capabilities insights and understandings that you could use to grow apps that's still true in a lot of ways but it's also true that you've got to go outside of that scope and more into the areas of traditional marketing PR social social search I heard one person talking and it's three minutes here these are really good at SEO they're getting a lot of organic installs from that absolutely influencer marketing is huge and the color switch guys know all about that and I recently wrote about that on Forbes actually talking with Zab I believe is really really interesting so there's a lot more that app marketers have to do know and become aware of internally in order to get their apps where they want them to

be okay second thing ratings are now table stakes very very interesting if you look at the top Android apps I'm talking the top 240 apps in each category the average four point one six stars they have a variance of 0.3 what that means is that sure if you don't have great ratings you're not getting it to top out but once you're in top apps those great ratings aren't a differentiator anymore now you're going to have to differentiate on a lot of other things iOS we see a same story 3.81 stars is the average of the top 150 apps per category on iOS in the App Store variants of 0.6 really really really tight are all those apps just so freakin awesome absolutely not they're gaming the App Store they're gaming Google Play and most you know exactly how that's working right they're asking the right user at the right time are you interested in reviewing us and those users are directing to give them a

review and a rating and that's how they're getting four and five star reviews I believe it was I didn't have a number here but it was 86% of all ratings on Google Play right now are four or five stars that's not normal that's not natural that didn't happen by accident that's because people are gaming who they're sending to review and rate their app if you're not playing that game you're going to lose out so a couple implications there yeah you still need good ratings because you want to be in the top apps you want to be the top two for your the top 150 your top 100 top 50 if you can be obviously and and higher but they're not differentiating you at least from the top apps obviously they're differentiating you from bottom feeder apps that's not who you want to be we've got successful people here you want to be at the top 10 the top 50 or something like that so you can need some other things to do that and can't go

into all those today unfortunately buddy hit me up a little later if you want third thing I wanted to look at ad fraud is absolutely massive so kind of bad news right ASO is having huge issues right now right we saw the branded issue that we just talked about we saw the ratings issue we just talked about and the bad news is that ad fraud when you're going to try and actually acquire users through paid user acquisition is also pretty screwed so I'm studying 702 ad networks right now and I have significant data on 455 of those that's 25 billion clicks over the last three months twenty five billion clicks over the last three months we've analyzed those four characteristics of fraud these are the worst 34 networks in that sample size five percent of them are 100% fraud 100% fraud those insoles are coming way too quick those installs don't follow a natural curve those installs are from outside the

geographical range those installs are from known data centers cortical data centers those are not from known bots other things like that and 34 of those are over 50% add fraud unbelievable this is the average add fraud percentage across all ad networks basing that on a sample size of about 700 700 to ad networks we're finding 15% fraud 15% of the clicks are just not real not actually true and in fact almost a fifth over a fifth almost a quarter of that networks have greater than 20% fraud so this is pretty pretty bad news this includes some pretty well-known some pretty respected ad networks some of the some of the partners that we work with and we work with uber we work with Twitter we work with Amazon we work with supercell we work with many of the top companies some of the partners that we talk to are quite convinced that you know a third of their installs are fraudulent and coming from things like

this and they go to their ad partners and they say hey look this show them the data we have the data we give them data we show them they show the data and the ad partners don't even argue don't even fight back they just cut a check or their share refund or they say hey we'll replace it with others that's interesting that's really interesting because they know there's an issue and they're accepting that issue the Reeb recurring that's going on so many different pieces of traffic that's coming into what any individual ad network is bringing you there's guaranteed to be some fraud there so three implications of that one is you're obviously paying for a lot of fraudulent installs right secondly pretty obviously do you need a solution that screens out fraud you can do that corne quote manually you can do that yourself obviously by looking at back-end metrics right you're not you know looking at the

front loaded metrics of acquisition new users but you're looking at usage you're looking at milestones in your app and other things like that that takes time that takes there's a longer feedback cycle there and it takes work you want to have a solution that's automatically looking for that flagging it when it sees it and showing you if let's say using ten providers let's say is using a hundred providers at ad partners it's showing you a graph of what those installs look like and all those installs look like there does that look like a natural normal curve is it not where are those installs coming from what's happening you need to be able to do that at scale quickly and finally as I just mentioned front-end metrics mean nothing and yet I still write quite frequently I still write for Forbes almost daily actually and almost every press release I get from somebody mobile we have 100 million downloads we have 50

million downloads or something like that and most app developers and you do this yourself it means almost zero it's nice it's a vanity metric what matters is people are actually doing things value creating users everybody here knows that you're not making any money if people aren't engaged what your what's going on front end metrics doesn't matter don't matter fourth Enterprise is catching up this is an interesting one because it's been really nice for app developers to be the fast smart nimble ones and you still are by and large but the big old companies aren't as stupid as they used to be it's the fat happy days are the end is in sight there so for instance we talk about Amazon earlier Amazon has four hundred forty percent more mobile customers than all of its competition combined this is a four hundred forty billion dollar company as I mentioned earlier it's not startup anymore even if

it still barely makes any money Jeff Bezos very carefully plays with R&D spend and other things like that to not make too much money there still doesn't turn a profit all that much although it has last year a little bit more but it's still day one right still day one so it's not just Amazon though and it's not just the rest of Google Apple Facebook Amazon and others like that this is Exxon Mobil Exxon Mobil has four hundred thousand mobile users this is caterpillar caterpillar has three hundred fifty five thousand mobile users that's an app that people are using to service their machine an app that they're using to order parts or service log what's going on with their machine and you can bet that there's going to be an augmented reality version of that that's going to help them diagnose and repair their machines over time as well right so what we're actually fine you know is that enterprise companies and big brands that

are doing well at mobile do well financially up to fifteen percent or better in stock market valuations so I just finished a major project that I call unicorn dinosaurs unicorns for high-value startups dinosaurs for big fat old companies and and the where they come together and I took all of the about thirteen thousand apps for all the Fortune 1000 companies and all their twenty eight hundred names subsidiaries grabbed what what those apps had done about ninety five billion installs and about four and a half billion ratings and reviews crunched all that data with their financials and how they're doing on the stock market first study of its kind ever I believe coming out and fall on May 9 but this is one of the findings from that study the dinosaurs are figuring it out they're starting to understand how it works they want to have a one-to-one relationship with their customers and they're coming

on board here so there's a couple implications of those things one you can't count anymore on being as far secure you're going to be more nimble than a large corporation but money counts too and they are smartening up to competition for attention is increasing right come just for attention competition for ad space competition for a number of icons that fit on a foam competition for a room in somebody's head all that stuff so challenging times challenging times that said everything is changing all over again and shockingly smaller more nimble partners more nimble people like you are well suited to adapt to that so there's a couple things that are changing that I want to look at and this is the fifth kind of area focus of my of my talk today one we're seeing massive increased investment in BOTS - we're seeing ongoing and massive increases in investment in AI and where that is relevant I think is assistance like a

Siri Cortana M Bixby if you want to add Bixby in there and potentially something from a Watson or something like that there's a there's a few other entrances making Alexa obviously right we have this quote from Sachin adela now such an Adele Marc self this is the stupidest quote I ever issued the stupidest thing you ever said bots are not the new apps and everybody who understands what BOTS are what they do and are sign with what apps are what they do with knows that but it doesn't negate the fact that bots are effective for some things it's heavy it's expensive in terms of time and effort it's a lot of friction for somebody to download an app to make an appointment or to buy a product there are some things that are bought in messenger in SMS on the web can do faster better more lightweight so there's some there's some eating at the app ecosystem from that more interesting perhaps who recognizes this by the way

thank you is assistance and we have to think about where our systems are going to be in two or three years right we know that most digital activity is moving to multiple about 68 percent seventy percent of American digital time is here right and we know that most of time here is in an app on an app 90 percent somewhere around there of course little caveat to that a lot of app time is actually mobile web time you're on Facebook you're following to an article you you follow a link and there's a video different things like that but most of times in apps but what about when you can ask Alexa to do what things that you might need five or six apps for today so I want Alexa planning a trip for me I want to go to Chicago I want to see the Cubs I want to eat out at Morton's I'll need a room for a couple nights and I want a flight that leaves Friday afternoon after 3 p.m.

that's coming that is 100% coming and that is a big freaking deal today if you want to do that on mobile you're going to be in four or five apps here got a lot of scrolling around figuring out and where you're going to sort this data we're going to get all it's hard it's challenging right but where are you if your hotels tonight or if your TripAdvisor or whatever in a world where somebody asked Siri to plan their vacation or in a world where somebody's a Siri what's the and I could start it here for Siri what's the best washing machine to buy right it comes back with something that fits my size because I've taken a picture and it knows the shape and everything and and fits my requirements that is going to be a revolution in how people can with products and with sellers of those products manufacturers those products so we've got to think about that and that is going to change the game as well and

this is all in context of something that is happening at the same time where actual growth of the app ecosystem is significantly slowing now I want to put some add a grain of salt here we're seeing that app growth in the US is down 38% since the boom in 2014 the grain of salt is that this is data from Adobe so Adobe sees quite a few things but their focus is more towards brand and to big enterprise so it's not necessarily true for the entire app ecosystem although they try to to make it fit and to make it match but we're clearly not in the gold rush anymore we're clearly not in the age where holy I've got I can put apps on my smart phone which ones can i download let's get them always you know to collect them all or something like that we're in an age where you know I've pretty much got the apps that I need if you've got a great game I might take a look but you know I've got five or six casual games that I pop into and

I've got 30 seconds or five minutes or whatever right see it's these applicant is mobile at user acquisition hard it's fricking hard and it's harder than it used to be and that might continue right so you add it all up and we've got box we've got AI and assistants we've got app install velocity slowing you know we've got the world changing again games might be a little different right games are this is the gaming platform of future but how long will this be the platform right I mean we're moving to glasses at some point right and our world will be visible through that we saw that at f8 and somebody mentioned that reference that with me when we're having lunch as well right but for apps that do things connect to things connect to people you know challenging times interesting times so it's day one what are you going to do who's this guy I said say it engross founder and CEO of Intel what's his mole

you can't answer this what's his most famous quote only the paranoid survive exactly awesome so thank you so much for your time this is what I brought to you from somewhere most recent research love to connect with you on Facebook Twitter Linkedin whatever it is thanks again