Dan Burcaw is Co-Founder & CEO of Nami ML. He built a top mobile app development agency responsible for some of the most elite apps on the App Store and then found himself inside the mobile marketing industry after selling his last company to Oracle.
Comprehensive Platform Laser Focused on Helping App Publishers Make More Money
Nami ML, a new startup transforming the use of on-device machine learning for in-app purchases (IAP) and subscriptions in mobile apps, has introduced support for enterprise analytics in their Mobile Revenue Automation platform.
Specifically, the new capabilities empower enterprise customers to leverage the Nami SDK with their existing Adobe, Google or other third-party measurement tools to gain more valuable insights into the performance of their mobile revenue campaigns.
“Nami is laser focused on helping app publishers make more money and we’ve heard from our enterprise customers how important it is that they be able to track and attribute revenue with their existing systems,” explains Dan Burcaw, Co-Founder and CEO.
“Nami is laser focused on helping app publishers make more money...and attribute revenue with their existing systems” — Dan Burcaw, Co-Founder Nami ML
Nami ML’s platform and SDK empower mobile app publishers of all sizes to tackle the challenges of making money with apps by growing in-app and subscription revenue in three key ways.
First, Nami makes it easy to integrate with the mobile app stores, starting with Apple's StoreKit, dramatically reducing the amount of time developers need to spend coding and testing.
Second, the Nami ML cloud-based platform gives marketers newfound capabilities to manage product offers and creative elements in their apps using a hosted service, instead of requiring constant developer updates.
Perhaps most importantly, Nami’s pioneering use of on-device machine learning to identify revenue behaviors in apps unlocks the promise of growing app revenue automatically in a way that protects end user privacy.
“Adding support for these enterprise analytics features will help solidify our emerging leadership position.” — Joe Pezzillo, Co-Founder Nami ML
“Nami’s groundbreaking revenue automation platform is at the forefront of the app economy and adding support for these enterprise analytics features will only help solidify our emerging leadership position,” added Joe Pezzillo, the company’s other Co-Founder and Chairman.
For complete information on the Nami(tm) platform and how it can help app publishers grow revenue, visit the website at https://nami.ml to learn more, request a demo and sign up today.
Nami is a trademark of Nami ML Inc., all other trademarks are property of their respective owners.
In Part 1 and Part 2 of this series, The App Economy and The User, we explored the how the App Economy’s focus on growth has wrecked the user experience for many apps, and how an over reliance on paid advertising in order to generate new downloads creates a negative cycle that is difficult to break.
In Part 3 we recommend an alternative approach that is win-win for users and publishers. But first, we should talk about monetizing growth…
Monetizing Growth
Five years after the introduction of the iPhone, just 35% of American adults owned a smartphone according to Pew Research. Fast forward to today, and ownership has skyrocketed to 81% in the US. Across the globe, smartphone ownership is on the rise in both developed and emerging markets.
It’s no surprise that over the same period of time, app publishers (1, 2, 3) have experienced rapidly growing install bases with tens of millions of downloads. With so many installs, it’s understandable that monetization strategies focused on audience size have become en vogue.
About Those Mobile Ads
According to AppAnnie, mobile accounted for 62% of digital advertising spend in 2018; a $155 billion market. Many of these “mobile first” ads promote the installation of other mobile apps and have become an essential part of app publishers’ user acquisition strategy as discussed in Part 2 of this series.
Monetization through ads is a volume game. Individual ad impressions are worth little to nothing except in the rare case a user taps on an ad. Sadly, many ads are poor quality and end up disjointing the user experience rather than harmonizing with it.
Mobile ads leave much to be desired.
In today’s era of Super Retina displays, it's shocking that agencies publish display ads which represent their brands and look lousy on high resolution displays.
Apple famously tried to improve the quality of mobile ads with their 2010 acquisition of Quattro, which was the basis for Apple’s iAd network. However, that effort was shuttered in 2016 as Apple shifted focus to app search ads on the App Store.
Interactive iAd brand campaign
Unfortunately, it’s not merely the look and feel of mobile ads that is a problem for end users. Ad frameworks that app developers thoughtlessly integrate into their apps in order to serve ads can do as much or more harm to user experience than ugly creative.
Selling Ads = Selling Out Your Users
Ad frameworks employ advanced targeting algorithms to serve ads to users. Most frameworks collect data about users under the guise of showing more relevant advertising. Relevancy sound great, but most users are unaware how much data an app is harvesting, especially apps that serve ads. How would you feel if an app was selling your data to the highest bidder? This is exactly what’s happening.
But what about apps without ads?
Even if an app isn’t serving ads, it may very well contain a framework that harvests your data.
Of particular concern are apps that use your location, such as weather apps. You may agree to share your location in order for the app to give you a relevant experience, but, unbeknownst to you, the same app might also be sharing your location with an ad targeting framework. With this data, ad technology companies can map your movements and quickly figure out where you live and work.
It’s not just the display ad providers, however, that are interested in data collection. The entire marketing and advertising technology ecosystem thrives on your data. Many of these companies view mobile as a key source in building immense data clouds full of rich user profiles.
Luckily, Apple continues to be focused on end user privacy, giving users more control about how and when their data is shared with apps. Apple has also made data collection much more transparent to the end user, especially with location sharing and Bluetooth access.
Furthermore, Apple’s App Store review guidelines continue to evolve, encouraging app publishes to focus more on end user privacy. While some apps have been updated to be on par with the new standards, others have gone above and beyond, offering a truly user-centric experience.
Some app publishers are following Apple's lead by offering more control over how data is collected.
The US Federal Trade Commission has also taken action against companies such as Facebook and InMobi, who have notoriously put profits above user privacy.
Wouldn’t it be great to build a real business around your app that customers are willing to pay for? It seems like such an obvious approach, but it’s not entirely that clear cut.
The app ecosystem has evolved a lot since the App Store launch in 2008. Several changes have challenged app publishers to embrace new monetization tools. Great apps can be expensive to build and maintain. App publishers need a reliable, viable means to make their investments worthwhile.
Let’s take a look at three common monetization approaches:
1. Pay to Download
Paid apps were the primary monetization approach in year one of the App Store. As the number of apps increased, however, publishers found themselves in a race to the bottom on price. A one-time price of $0.99 in a growing-but-nascent market was clearly not a recipe for sustainability.
Paid apps were common on the App Store in 2008.
2. In-App Purchases
Apple introduced in-app purchases in 2009, originally restricted to paid apps and available to free apps later that year. This created a new avenue for monetization with inexpensive, and later free, apps attracting larger audiences and offering in-app purchases.
This model has become ubiquitous in games. A consumable resource such as virtual coins can be sold to players to be used to buy virtual commodities, unlock features, or speed up the progress of a game. Monster money maker like Clash of Clans provides in-app purchases that allow players to remain competitive against the legion of other players across the internet who are doing the same, culminating an in-app purchase arms race of sorts.
Many mobile games sell virtual coins via in-app purchase which are spent during game play.
Across all app genres, in-app purchase are used for countless add-ons from photo filters to recipe bundles to workout routines. They are even used to allow users to remove ads from an app, letting the app publisher trade one revenue source for another.
The 'arms race’ phenomenon, however, doesn’t exist in non-games. Because most non-games lack a linear progression or an endless market of virtual goods, in-app purchases haven’t radically improved the long term sustainability that app publishers want outside of the game category.
In-app purchases that unlock an ad-free mode continues to be a common across categories.
3. Subscriptions
After the iPad launched in 2011, Apple introduced in-app subscriptions which were originally reserved for content publishing apps such as newspapers, magazines, video, and music.
Apple’s signature launch partner for in-app subscriptions was News Corp’s The Daily. The Daily was ahead of its time in its user experience and monetization approach, but iPad users weren’t ready and The Daily was discontinued just a year later.
The Daily, an iPad only newspaper from News Corp, was ahead of its time.
Fast forward to 2016. Four years after the launch of The Daily, Apple reported having 1 billion active devices in use around the world. This incredible milestone meant a renewed opportunity to build strong recurring revenue businesses in the ecosystem.
To do so, App Store subscriptions were overhauled and opened up to apps in all categories and improved its revenue split to be more friendly to app publishers. The original split was 70% to the app publisher and 30% to Apple. The new split was 70/30 in the first year, and 85/15 in subsequent years. This model still exists as of this article’s publication (Oct 2019.)
The in-app purchase model seems to be working. According to App Annie’s State of Mobile 2019report, consumer spending is up 120% since 2016, largely attributable to growth from subscriptions. The firm forecasts that subscriptions will drive the app economy to grow by another $75 billion dollars by 2022.
Welcome to the Subscription Economy
It’s clear that we’ve entered an app economy that is fueled by subscriptions.
Building a paid customer base focused on growing recurring subscription revenue is so fundamentally different from focusing on audience growth, where acquiring new users is much of the ballgame. How do app publishers thrive in this new world?
A mindset shift is necessary. In the subscription economy, it’s vital to be at peace with the fact that not all users who visit your website or download your app are going to become paid subscriptions.
A Mindset Shift
In the subscription economy, your job is to identify and encourage your users, and nurture them through a customer journey. Through that journey you’ll understand that your best users have high potential to become your best customers.
The subscription customer journey is not focused on creating hyperactive usage patterns to inflate growth metrics like MAUs. It’s also not a one-size-fits-all journey. Some users need more time to evaluate and consider whether your app serves a need. Others will know right away.
Your job is to make sure your experience isn’t creating artificial roadblocks or messaging users for self-serving reasons. Those retention email and push messages reek of desperation, and will turn users that might otherwise have become paying customers.
Best-in-class iOS apps, like Flighty, are focused on delivering a great product experience that there best users are willing to subscribe to.
The best subscription apps let go of the baggage from the growth era. Rather than spending inordinate time and energy trying to prevent those low-quality users from churning, these app publishers focus on building a great experience that some users will love.
Spend most of your time optimizing your experience to provide unquestionable value to a certain audience, and spend little time focusing on the rest.
Build For Your Fans
In the subscription economy, converting a user to a paying customer isn’t the finish line. Your job is to continue to build and reenforce the value of your product. If you do this, you have a chance to earn an even more profound stage in your app’s customer journey: true fans.
This is an elite club, so don’t expect a large volume of users in this cohort. That’s okay. They are, however, your best customers. Why? They have the lowest churn risk and the highest Customer Lifetime Value(CLTV). They will help your marketing efforts without being asked by recommending your app through word-of-mouth. They will even give you the benefit of the doubt when the inevitable bug is introduced.
Imagine a world where you focus on building a product that is valued by your customers and delights your fans rather than figuring out how to more efficiently coax and nag the millions of users who downloaded your app. Build for your fans and you are one step closer to building a healthy app business.
P.S. Your fans understand the true value of your product so they will likely pay far more than you think you can charge.
Embracing Subscriptions
Unlike ads and even basic in-app purchases, offering in-app subscriptions is quite a bit of work to not just launch, but maintain over time. This work is further complicated if your app is available across multiple app ecosystems or if you offer a way to purchase on the web.
In addition, once you launch, it's incredibly important to have the flexibility to iterate on your subscription offers, marketing, and pricing so you can optimize revenue and customer satisfaction. Nami's here to help. Our Subscriber Experience Cloud is a complete suite of tools to help you get to market fast, gain insights to help you optimize your subscriber experience which is good for revenue and customer satisfaction.
If you're thinking about adding subscriptions to your app, we invite you to learn more about Nami.
A hyper growth mindset has infiltrated every aspect of the App Economy. As we explored in Part 1 of this series, The App Economy and The User, growth metrics such as monthly active users (MAUs) have created perverse incentives for app publishers to the detriment of end user experience. In Part 2, we dissect how app publishers are growing their user base.
Houston, We Need to Grow
Your boss comes to you and says, “We need to get to 100,000 MAUs in 6 months.” What do you do?
This is exactly the situation that Sara Cole found herself in on her second day as Marketing Director for Eyecon Global. Cole’s challenge was exacerbated by the fact that she was working at a bootstrapped startup with significant resource constraints.
Cole met the challenge and was not only able to reach the initial growth goal, but exponentially surpass it - over the next 24 months, Eyecon achieved 11 million downloads.
How did she do it?
Organic Growth
Cole’s first step was to work on growing organic downloads. That is, new users who cannot be directly attributed to an advertisement. For instance, if a user installs your app after browsing or searching the App Store, they would be considered organic.
A user is consider organic if they install your app without first interacting with an ad.
App publishers can cultivate organic growth by honing keywords, tweaking marketing language, and making other improvements under the umbrella of app store optimization (ASO).
App store optimization (ASO) is the process of optimizing mobile apps for the purpose of achieving a higher rank in the app store search results and top charts rankings. Due to similarities with search engine optimization (SEO) for websites, app store optimization is also referred to as app store SEO, app search optimization, and mobile app SEO. (Source: Meatti)
With the abundance of apps available, if a user simply downloads your app it is a meaningful signal that they are interested in what your app offers. Additionally, since these users aren’t gained from an advertising campaign they likely cost less to acquire.
Optimized app store listings have carefully tuned keywords, creative elements, and marketing text.
While someevidence suggests that organic downloads are often better than other methods at retaining users, the industry has shown an unwillingness to depend on on organic growth alone.
With this in mind, ASO wasn’t the only approach Cole used. There was more she had to do to achieve her growth targets…
Paid Downloads
Increasing organic downloads through ASO and other marketing takes time. Due to this reality, purchasing app installs has become a generally accepted practice used by app publishers to generate growth.
Called cost per install (CPI), app publishers pay whenever an ad results in a new install of their app. Major CPI vendors include the usual suspects including Twitter and Facebook.
Twitter enables marketers to surface app install ads based upon various targeting criteria.
Silicon Valley firm AppLovin is another major leader in the paid download space. In 2016, a Chinese private equity company agreed to pay over $1.42 billion to acquire the firm - proof that the CPI market is big business.
Ad networks often serve low-quality install ads which often don't articular what the app is or why a user should both to download it.
Apple even participates in paid downloads by selling Apple Search Ads which feature prominently in the App Store.
Apple's App Store Search Ads tend to surface highly relevant results based upon search keywords.
According to Growth Bug’s Deepak Abbott, however, marketers boast about optimizing CPI (e.g. paying less per install), while not fully appreciating that doing so may lead to difficulty keeping such users active.
Abbott recommends app publishers use smarter metrics including cost per active user and monthly retention to inform how to focus resources.
Sara Cole confirms this approach. At Eyecon, she used A/B testing to strike a balance between keeping CPIs low and retaining users, but…
Churn and Growth Whack-a-Mole
Relying heavily on paid downloads or the wrong type of paid downloads can quickly turn problematic. It’s a bit like eating sugar. A little is not bad, but too much will deliver a short term kick followed by a very hard crash.
Imagine your boss walks in one day and says, “We need to grow faster!” A typical solution might be to up your advertising spend because it generates more installs. The growth manager immediately gets to work and is excited to start executing campaigns that achieve a low CPI.
Installs increase. Crisis averted! - Reverse that. You’ve just arrived at churn. New users abandon your app as quickly as they installed it.
What’s the prescription for churn? Most of us have experienced apps that send way too many notifications reminding (read: begging) us to visit the app.
The solution for the user to rid the annoyance is to turn off notifications, right? Many of us have experienced the onslaught of emails that follow, pleading for our return to the app.
To compound the issue, app publishers often do not differentiate messaging for actively engaged users (low churn risk) from users who are less engaged (high churn risk). Instead, they panic and blast all users with one-size-fits-all messaging.
I experienced this first hand from a well-known meditation app. After a much needed meditation, I left the app and within minutes was disrupted by ‘re-engagement’ messaging. It was infuriating, not calming. Not only was the notification patronizing and counter to the entire point of meditation, it felt like an act of desperation by the app publisher. This wasn’t a one time occurrence and (so far) has resulted in less frequent use of the app.
The problem with over messaging is simple - Best case: Users tune you out which negatively impacts your monthly active user metric. Worst case: Users delete your app and you get churn.
This cycle is hard to break, especially in an ecosystem that is addicted to hyper growth based upon metrics that don’t account for quality of engagement.
"90% of our daily growth comes from organic and viral downloads." - Sara Cole, Marketing Director, Eyecon Global
Ultimately, Eyecon’s Sara Cole ended up with a healthy organic growth story, meaning her company was well positioned to focus less on retaining low quality installs.
Until Next Time…
In Part 3, we’ll explore how to build a healthier relationship with our users by focusing on selling your app, not your users.
Nami Co-Founder & CEO Dan Burcaw joins Moving Fast Technology - Boulder for a panel discussion about bringing AI + Machine Learning to life in products from MVP to production.
Topic: Machine Learning + AI
Your task is to deliver usable, multi-platform software with limited or no budget in weeks. Mission impossible? Learn what others have done and the helpful new technologies and tools they've used to successfully deliver POCs and MVPs in short time frames. Get 3 different perspectives from people in the trenches who are moving fast: a CEO, CTO/VP Engineering, and Developer.
Panelist
Sara Bates: CEO & Co-founder of MamaMend (Techstars '18), Data Scientist, Engineer, Machine Learning Advisor, Co-organizer of Boulder Women in Machine Learning & Data Science (WiMLDS) LinkedIn: https://www.linkedin.com/in/sarabates/
Diana Pfeil: Diana is a data scientist with a passion for building useful data products. She is currently a data scientist at Honey, and has worked in machine learning in various roles for 15+ years, including as a startup CTO, an adjunct at CU Denver teaching predictive analytics, and as a software engineer in the machine learning group at Amazon. She received a PhD from MIT, where she focused on machine learning and optimization. LinkedIn: https://www.linkedin.com/in/dianampfeil/
Dan Burcaw: Dan is the Co-Founder & CEO of Nami ML, a company at the intersection of mobile and machine learning. Before Nami ML, Burcaw led mobile product for the Oracle Marketing Cloud. He joined Oracle via the acquisition of Push IO, a leading mobile messaging provider, where he served as Co-Founder & CEO. LinkedIn: https://www.linkedin.com/in/danburcaw/
Join us!
Wednesday, September 25, 2019
6:00 PM 8:00 PM
Galvanize - Boulder, 1023 Walnut Street, Boulder, CO, 80302 United States (map)
Join the Nami team at one of the premier indie iOS developer conferences. Learn about how the Nami platform can help you get the most out of Apple App Store subscriptions.
Sun, Aug 25 - Wed Aug 28
Grand Hyatt Denver, 1750 Welton Street, Denver, CO, 80202
