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To say that the mobile landscape is evolving quickly is an understatement — what worked yesterday is going to stop working today, and end up leaving you behind. It’s happening at lightning speed as the number of advertisers on mobile continues to expand.

Rising costs and diminishing returns

“The cost of mobile advertising has increased by almost eight times in the past three years,” says Andrew Paradise, CEO and founder of the mobile esports platform SKILLZ (which closed a $15M Series B investment round last September) — and guest on our upcoming webinar.

And yet, says Paradise, “The number of players hasn’t increased. There have been a lot of businesses built that are either only marginally profitable or not at all.”

Even the top publicly-traded mobile gaming companies are feeling the burn. “Their profits are being almost completely absorbed by rising advertising costs,” Paradise says. And the rising cost per install campaigns are pricing out the smaller developers.

A lot of the struggle comes from the fact that when most companies took the leap from web into mobile, they brought along with them their web CPC expectations and web advertising assumptions. “And that’s worked pretty poorly, to be honest,” Paradise notes.

And the biggest mistake most mobile advertisers make, he says, is assuming the existing channels will continue to yield indefinitely. “So far none of the mobile channels seem to have the longevity of something like television,” Paradise says.

New channels, new technologies

Instead, mobile companies that depend on mobile advertising to survive need to be incredibly agile in terms of finding new channels and new types of creative, to drive the right kind of downstream actions that attract whales who will really spend.

“We’re looking at where there’s gold in advertising right now on mobile,” Paradise says, which includes levering new technologies in new ways — and doing a better job inside the app.

Paradise cites microgame ads, and in-app videos as particularly exciting. “Instagram ads and Twitter video,” he says, “are both showing to be very effective technologies and platforms for scaling mobile advertising.”

On the data side, marketers should be focusing on optimizing downstream metrics to improve the quality of their installs, and focus on paying customers. Ten thousand installs at 50 cents a piece sounds tempting, but chasing those downloads are too often a waste of time and resources.

“One of the things people get really caught up on,” Paradise says, “is getting a lot of really low-quality installs at a pretty low price with mobile advertising. But then those downloads may yield very few paying customers.”

Combating the uninstall

“The big battle is to not be uninstalled in that first session,” Paradise says, noting that he’s seen some applications with 50 to 75 percent uninstall rates within 10 seconds of downloading and opening.

The big problem with focusing on installs is that it’s fairly expensive to get potential customers to go all the way through a downstream action of installing an app from the app store. And immediate uninstall is a huge risk, Paradise acknowledges.

Grabbing the user from the get-go needs to be the focus of your entire install campaign, and it takes some creativity and some data. App tracking services like Kochava let you see where the traffic is coming from, and optimize the experience of opening the app from there, and tying it strongly to the campaign that got the user there.

“You can imagine that if you did that,” Paradise says, “you’ll have a much more contextually relevant experience for the user, and reduce the likelihood of uninstall.”

Landing Moby Dick

The whale user. The player who spends 1K a month on buy-ups in a $4.99 game. Targeting the whale successfully is the Holy Grail of mobile marketing, and it takes both investing in data and paying more for your users.

Companies that nail their whales have the analytic capability to recognize a whale’s spending pattern early on. For instance, Paradise says, Zynga rigorously analyzes behavior and spending patterns from the first day, and continues to track them carefully through a month of usage: at 7, 15, and 30 days, so that whales can get segmented out early.

Just as important is the analytical capability to match that whale back to a traffic source — all the way to particular campaigns that are yielding those kinds of users.

And when you’re getting whales, Paradise says, allocate your spend accordingly.

“You may spend $15 to $20 an install for the users that are yielding that 10k spend,” he says, “but it’s certainly worthwhile.”

Want to hear more?

Join Andrew Paradise and his copanelists, Scott Monty, former head of global social media at Ford Motor Corporation and VB analyst Jon Cifuentes to learn how to sharpen your harpoon.

Don’t miss out!

Register here for free.

 In this webinar, you’ll learn how to:

  • Determine the ROI of your mobile app investments
  • Partner with software developers to create innovative, multi-platform apps
  • Leverage programmatic transactions with analytics
  • Incorporate insight from social media, public data, and in-house information to create more complete customer profiles
  • Expand into mobile ad search.


Jon Cifuentes, Analyst, VB Insight

David Jaye, CMO, The Weather Company

Andrew Paradise, CEO, Skillz


Wendy Schuchart, Analyst, VentureBeat