While consumers have flocked to smartphones and tablets, companies and advertisers have been slow to follow.
TapSense Inc. CEO Ash Kumar predicted that situation would eventually change and sought to capitalize on it when he co-founded the mobile marketing cloud platform with ex-Google engineer Amit Manjhi in 2011. The San Francisco-based company raised seed money from XG Ventures, Maynard Webb and SV Angel.
“We looked at how brands were using their iOS and Android platforms. They didn’t know how to cater to them because most of the Web technology didn’t work very well in mobile,” Kumar says.
So TapSense built a marketing platform that has attracted large customers such as Facebook, Amazon.com and eBay, and has already become profitable.
“We knew that brands would eventually come to the realization that they need to cater to mobile users who are savvy. They are on the smartphones and literally have the Internet in their pocket all of the time,” Kumar says. “The platform has been live for 1½ years, and we work with about 100 brands and agencies as well as different demand partners.”
Getting Started in Mobile
When looking to get involved in the mobile arena, it makes sense to start with iOS, Kumar says. Most companies don’t have the luxury of having separate teams devoted to launching iOS and Android mobile platforms.
“They have to prioritize. And if you’re looking at quarterly revenue and having the most impact right out of the gate, iPhone and iPad is the way to go,” Kumar says.
That’s because iPhone and iPad users are typically more affluent. A comScore report found that 41 percent of iOS users earn more than $100,000 annually, compared to only 24 percent of Android users.
“On the other hand, Android has a lot more scale. The best scenario is to build your iPhone/iPad app, start understanding mobile and how to monetize it,” Kumar says. “Then get into Android when you are at a stage where you need to grow the user base.”
Instagram followed that formula, and didn’t have an Android app for the first two years. When its Android app launched, Instagram doubled its user base in less than three months, Kumar says.
“That’s just because of the sheer scale of Android. So on average, you might not monetize as fast, but there is a lot of growth and scale. Launching an Android app really depends on where you are in your life cycle,” he says.
Once you understand mobile marketing and key metrics within your mobile property, the next step is organic marketing, Kumar says.
If you have a website, add a link to download your app so you can measure conversions from that, he says. Marketing efforts also could feature social media and push notifications.
“Options are available where you initially don’t have to spend a penny to see the benefits of mobile marketing,” Kumar says.
That marketing can lead to a higher ranking in the app store, even if that’s not the intended goal. Kumar says that’s where mobile marketing becomes very different from the Web, where Google search rankings are key.
“It’s really a data-driven, metrics-driven model to doing organic marketing and then doing paid marketing. It can be very difficult to oversee,” Kumar says.
Most companies find that it takes three to six months to fully understand metrics and get very involved in mobile advertising.
Keeping Up With the Trends
Two big trends Kumar sees in mobile marketing for 2014 are native ads and real-time bidding. TapSense launched its marketplaces for both products earlier this year.
Native ads are designed to be less obtrusive than banner ads, and are incorporated within the flow of information on an app or website. Banner ad detractors also argue that someone is more likely to survive a plane crash than click on the ads.
“The click-through rates are poor. That’s something Facebook struggled with, even online. They could not monetize it,” Kumar says.
So when Facebook started testing mobile apps, it experimented with an ad unit in which the ad is shown as content.
“It’s very similar in layout in look and feel, except that it says that it is sponsored,” Kumar says. “The end user experience is very easy, it’s seamless and less offensive than a banner ad. The click-through rates have been phenomenal for Facebook, and all the metrics show that it’s the future.”
By tying native ads into backend metrics, companies can measure the performance of marketing efforts and ensure ad dollars are not wasted, Kumar says.
“If you use a Starbucks app to buy coffee, Starbucks can tell if this user came from a paid advertising campaign or a social campaign. So this whole notion of multichannel marketing is really coming into full force,” he says.
The other big trend, real-time bidding, offers advertisers a market to bid on publisher inventory of native, video, interstitial and other ad units.
“I use the analogy of buying stock on the New York Stock Exchange or NASDAQ. You see the price in real time, and bid on it. You win or someone else wins, but the price of the stock moves in real time. That’s the way most commodities are,” Kumar says.
Advertising campaigns have been very relationship-based and the time between launching a campaign and getting results back may be two weeks, he says. At that point, companies may look at the results and realize they paid too much for the campaign.
“Real-time bidding is a way to make available advertising more efficient. An ad is shown to multiple bidders and whichever bid is higher, given that targeting and other things match up, shows up for that ad,” Kumar says.
The winning bidder knows the value of the ad user, and can tie that back into the performance of the ad, he says.
“Rather than waiting two weeks, now you can know the performance in maybe five minutes,” Kumar says.
Mobile marketing has plenty of room to grow — a survey TapSense took last October found that 52 percent of advertisers had a mobile marketing budget of $10,000 or less. Kumar expects that will change as competition for consumer attention on mobile grows.
“About 10 years ago the PC became a hub for digital music, videos and so on. I see the same thing happening with the iPhone, where the mobile device is becoming the hub for much greater things. People are developing all sorts of sensors you can use to unlock your home or garage,” he says.
“The potential is just amazing for what can be done with these platforms in the next few years. We are just happy and excited to be part of this revolution.”