1.
State of the App Economy:
Trends and Tactics for 2018
and Beyond
Eric Benjamin Seufert
Casual Connect Disneyland, January ‘18
N3TWORK

2.
Who I am
N3TWORK Mobile Dev
Memo
Freemium
Economics

3.
Previously

4.
Presentation Structure

5.
Presentation Structure
1) Current State of the App
Economy;

6.
Presentation Structure
1) Current State of the App
Economy;
2) 3 Challenges & Opportunities,
2018;

7.
Presentation Structure
1) Current State of the App
Economy;
2) 3 Challenges & Opportunities,
2018;

8.
Current State of the App Economy

9.
• The Duopoly (Facebook and Google) owns
considerable mobile audience and that audience is
growing;
Current State of the App Economy

10.
Source: Nielsen
Current State of the App Economy
Source: Nielsen
Source: comScore

11.
- 8 / 10 of the most used
apps (in terms of unique
audience) owned by
Facebook & Google;
- “Legacy” apps like
Facebook, YouTube, Gmail
still growing at >10% YoY.
Source: Nielsen
Current State of the App Economy

12.
- Many of these apps are ad
channels and / or
third-party content
distribution channels.
*
*
*
*
*
*
*
Source: Nielsen
Current State of the App Economy

13.
• The Duopoly (Facebook and Google) owns
considerable mobile audience and that audience is
growing;
• The Duopoly has productized its massive quantity
of user data into industry-leading, proprietary ad
bidding and targeting tools;
Current State of the App Economy

14.
Current State of the App Economy
Source: Marketing Dive
Source: AdWeek

15.
• As a result of its proprietary data and the tools
that utilize it, the Duopoly has captured a massive
portion of the mobile advertising market;
Current State of the App Economy

16.
Current State of the App Economy
Source: IAB
Source: eMarketer
Source: eMarketer / WSJ

17.
• Engagement is being concentrated in a smaller
number of apps;
Current State of the App Economy

18.
Current State of the App Economy
Source: comScore

19.
Source: SensorTower / Unity
*Applies specifically to mobile gaming
Current State of the App Economy

20.
• Engagement is being concentrated in a smaller
number of apps;
• The biggest apps are becoming 3rd party content
distribution platforms & intermediating the app
discovery process;
Current State of the App Economy
see: The coming war between Apple and Facebook,
http://mobiledevmemo.com/coming-war-apple-facebook/

21.
Current State of the App Economy
Source: Facebook

22.
Current State of the App Economy
Source: Apple

23.
Current State of the App Economy
Source: Variety / Facebook

24.
Old Discovery Paradigm
App Store / Google Play
App
Content Consumption
“App Discovery”

25.
New Discovery Paradigm
App Store / Google Play
App
Proprietary 3rd-Party Content
Catalogue
(“App Store”)
Content
“App Discovery”

26.
Current State of the App Economy
Is Netflix the “App” and the
App Store the Discovery
Channel?
Or is Narcos the “App” and
Netflix the Discovery
Channel?

27.
• “Content” on mobile increasingly means Video, and
this is creating an enormous torrent of new
advertising inventory;
Current State of the App Economy

28.
Current State of the App Economy
Source: Zenith / ReCode
Source: Cisco / AT Kearney

29.
Current State of the App Economy
Source: BI Intelligence
Source: eMarketer

30.
• “Content” on mobile increasingly means Video, and
this is creating an enormous torrent of new
advertising inventory;
• Mobile video has impacted television viewership
and movie ticket sales, and big screen advertising
dollars are flowing onto mobile;
Current State of the App Economy

31.
Source: eMarketer
Source: Zenith
Current State of the App Economy
Source: eMarketer
Source: eMarketer
Source: comScore

32.
Current State of the App Economy
• August 28th, 2017: three
streaming video apps and one
game in the Top 5 grossing (US,
iOS).

33.
Presentation Structure
1) Current State of the App
Economy;
2) 3 Challenges &
Opportunities, 2018;

34.
Challenge / Opportunity:
Making sense of proliferation of
new platforms for user
engagement / content
consumption.

35.
When every device is connected, every device appears to be
a platform on which to develop & reach a new audience:
3 Challenges & Opportunities

36.
When every device is connected, every device appears to be
a platform on which to develop & reach a new audience:
3 Challenges & Opportunities

37.
• Tech media sometimes uncritically promotes all emerging
platforms as ascendant “next big thing”;
3 Challenges & Opportunities

38.
• Tech media sometimes uncritically promotes all emerging
platforms as ascendant “next big thing”;
3 Challenges & Opportunities

39.
• Tech media sometimes uncritically promotes all emerging
platforms as ascendant “next big thing”;
• New platforms are appealing (first mover advantage, lack
of price discovery, etc.) but developers need to be able to
discern hype & time deployment correctly.
3 Challenges & Opportunities

40.
• Example: VR vs. Mobile Gaming
Source: SensorTower / Unity
3 Challenges & Opportunities

41.
OPPORTUNITY: Opportunities to reach new audience
emerge constantly as connected devices proliferate and
create platforms;
CHALLENGE: Difficult to know which platforms will truly
reach scale, and being early same as being wrong.
3 Challenges & Opportunities in 2018

42.
Challenge / Opportunity:
The largest social networks are
almost certainly facing
impending regulatory scrutiny.

43.
3 Challenges & Opportunities
• World governments are beginning to take note of
the proliferation of disinformation / propaganda on
the largest social networks;

44.
3 Challenges & Opportunities

45.
3 Challenges & Opportunities
• World governments are beginning to take note of
the proliferation of disinformation / propaganda on
the largest social networks;
• The companies that operate these networks are
reacting slowly / reluctantly, and regulation seems
likely to be introduced.

46.
3 Challenges & Opportunities
Source: YouTube
Source: The Register
Source: Reuters
Source: Inc.com

47.
OPPORTUNITY: These types of changes are difficult for big
organizations to react to and satisfy quickly, creating space
for nimble companies to comply & accelerate.
CHALLENGE: Laws around use (and possibly even collection)
of certain data produces challenges in keeping products and
advertising compliant.
3 Challenges & Opportunities in 2018

48.
Challenge / Opportunity:
Growth of Walled Garden
advertising platforms.

49.
3 Challenges & Opportunities
• The biggest mobile advertising platforms are
becoming siloed, both in terms of tool offerings
and inventory offerings;

50.
3 Challenges & Opportunities
• The biggest mobile advertising platforms are
becoming siloed, both in terms of tool offerings
and inventory offerings;
• The biggest inventory sources are vying to own
advertiser data as a form of lock-in.

51.
3 Challenges & Opportunities
Source: Google; MarketingDive

52.
3 Challenges & Opportunities
Source: Facebook

53.
3 Challenges & Opportunities
• Event-based bidding via machine learning makes
advertising on that channel more efficient, but
advertiser doesn’t own the optimization;

54.
3 Challenges & Opportunities
• Event-based bidding via machine learning makes
advertising on that channel more efficient, but
advertiser doesn’t own the optimization;
• Some platforms are merging all proprietary
channels into single interfaces, mixing performant
channels with non-performant and charging for all.

55.
OPPORTUNITY: Platform-specific tools and inventory help
advertisers reach appropriate audiences more efficiently;
CHALLENGE: Walled gardens create scaling difficulty for
advertisers. Analytics / infrastructure “lock in” can limit
growth.
3 Challenges & Opportunities in 2018

56.
Über Points / Takeaways

57.
1) The App Economy is evolving rapidly with respect to
the way consumers think about “apps” and discovery;
Über Points / Takeaways

58.
1) The App Economy is evolving rapidly with respect to
the way consumers think about “apps” and discovery;
2) Video is the new, massive mobile frontier;
Über Points / Takeaways

59.
1) The App Economy is evolving rapidly with respect to
the way consumers think about “apps” and discovery;
2) Video is the new, massive mobile frontier;
3) Walled gardens are making it harder to stay
technologically flexible / platform agnostic;
Über Points / Takeaways

60.
1) The App Economy is evolving rapidly with respect to
the way consumers think about “apps” and discovery;
2) Video is the new, massive mobile frontier;
3) Walled gardens are making it harder to stay
technologically flexible / platform agnostic;
4) Increased regulation will create uncertainty /
compliance overhead.
Über Points / Takeaways

61.
eric@mobiledevmemo.com
@eric_seufert
MobileDevMemo.com
Thank You!