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BELOW-THE-LINE IS THE BEST BET IN RURAL INDIA: AN EXTRACT FROM THE BOOK, DONT FLIRT WITH RURAL MARKETING P2
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RV RAJAN, FOUNDER, ANUGRAH MADISON ADVERTISING
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provide users with additional tools for editing their pictures. These are free apps with banner ads. The only way to get rid of these irritants is to upgrade. Racing game fans could understand the concept better in terms of the light (free) and pro (paid) versions. According to Kundan Kumar, director, AdStuck Consulting, a developer of apps and software on augmented reality, if an app gets about a lakh downloads and chooses the banner advertising option, the developer can easily make around ~2,000-3,000 for each download every month. If you choose to load up the app with featurerich, video ads, you stand to make around ~50-70 per view. This model is similar to the way video advertisements on YouTube work. Only if a viewer sees the entire ad, will the advertiser pay YouTube. The rules are more flexible for apps. One may work out terms with advertisers, ascertaining a minimum view time. Like, say, the user must view the advertisement for at least five seconds. To circumvent this user apprehension with regard to viewing advertising, there is a carrot you can dangle in the form of incentivised advertising. Agarwal of Reliance gives the example of a game it is developing, Real Steel World Robot Boxing. If the user is unwilling to pay for an upgrade, we will give him the option of viewing an advertisement. And for viewing it, he will be given a certain number of coins to be used for the upgrade. He adds that this is a fairly common trend internationally and will work just as well in the Indian market. The revenue generated via advertising is also shared with the app stores. Apple and Google have their own ad networks, iAds and AdMob respectively. These networks connect advertisers (brands/companies) with publishers (app developers) selling inventory space (banner advertisements in apps). Additionally, app developers can sign up with independent ad networks like InMobi, Komli and Vserv to attract operating system-agnostic advertising. The alternative to the freemium model is, you keep the initial download free and as the user gets hooked the word to better explain the users state of mind would be addicted ask him to pay for higher levels. Even some of the features may be withheld in the lower levels and the complete experience may be unlocked only in the higher levels. A model to consider would also be to charge differently for versions across devices. Like keep the mobile one free and charge for the tablet or desktop version. As Chavan of Metasys Software says, at some point the user is bound to get tired of the smaller screen and move to a larger one. And then you have the in-app purchases. Remember Farmville on Facebook that made farmers out of avid city dwellers, who bought goats and cows zealously for their virtual farms? Those goats and cows are the equivalent of in-app purchases. Consider the current rage, Candy Crush, the jelly bursting game. You can download it for free and play till you exhaust your five lives. Post that, you must either purchase additional lives or undergo the excruciatingly painful few hours, while your lives get refilled. This is just one example, of course. The in-app purchases could come in many forms, coins, points or even create online-offline synergies like Angry Birds did, linking purchase of ingame coupons to be exchanged for offline merchandise. The biggest incentive for opting for the in-app purchases is being able to bypass the revenue sharing clause with the app store. So, if the app is free and uses in-app purchases, what is the incentive for the app store to list it? Why would they still welcome a non-money making app into their fold? Simply because of the numbers. We live in an app-world where it no longer matters if as an app-store you got something special. It is more important to ensure that you got everything that competition has. A fundamental rule of marketing really. And as Kumar says, apps are also indicative of the shortcomings of the mobile handsets in a way. Take the example of the torch app that was quite popular for Apple iPhone users until a couple of months back. In the latest OS upgrade, the iOS 7, Apple finally introduced a torch feature at the click of a button, making all those app downloads redundant. As an app developer you may be giving the phone manufacturers cues on what next, albeit unknowingly.
Organisations gaining competitive advantage through high cloud adoption are reporting almost double the revenue growth and nearly 2.5 times higher gross profit growth than peer companies that are more cautious about cloud computing, finds a recent IBM survey. The survey conducted with more than 800 business decisionmakers and users worldwide also revealed that the clouds strategic importance to decision-makers, such as CEOs, CMOs, finance, HR and procurement executives, is poised to double from 34 per cent to 72 per cent vaulting over their IT counterparts at 58 percent. Compared to more cautious cloud adopters, leading organisations are 117 per cent more likely to use cloud to enable data-driven decisions. In addition, IBMs research found that leading organisations are looking to the cloud to differentiate them from their competitors. In fact, they are 136 per cent more likely to use cloud to reinvent customer relationships. By 2017, the public cloud services market is predicted to exceed $244 billion. Companies are looking to capitalise on this fast growing opportunity around the cloud for business transformation. The venture capital community is also keenly watching cloud technology startups. The cloud has made the start-up business model more accessible to people with smaller budgets while transforming the level of productivity and accelerating innovation keys for VCs working to decide where to place their next big bets.
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have social networking apps, which are again mostly free (a few like chat app Whats App are paid). Then there are utility, lifestyle and gaming apps. This is where concerns over monetisation surface and the discussion about the choices begins.
So how do I choose?
Source: XYO Logic, Avendus estimates
SPLIT OF APP DOWNLOADS BY CATEGORY, JUNE 2013 (% OF TOTAL DOWNLOADS IPHONE & IPAD APPS)
India free apps (%)
Source: US & Global Graph: Flurry Analytics, Comscore Digital Omnivores India Graph: Nielsen Informate Mobile Insights Apr-2013
the platform. As a developer, one may have an original idea and design ones own app. But one may lack the monetary muscle to back its listing on the app store with requisite marketing dollars to aid discovery of the app. Developers then approach publishers, entering into a revenue sharing agreement with the latter. It may be a straightforward revenue share or certain key performance indices may be set, like X number of downloads, post
which the agreement would kick in. These revenues are naturally shared post the platform or app store taking its cut. Next, what are the options? First, there are the brand or company apps delivering a service or working as an e-commerce platform (consider the banking, trading, retail and e-tailing players). These are almost always free. Their nature is to engage with the consumer and generate revenue. Next you
The simplest one is to be a paid app. The app store will charge a revenue cut of 20-30 per cent for every download. So, if your app is priced at ~100, the app store will take ~20-30 per download, returning the rest to the developer (technically returning, since the user is paying the app store at the time of the download). The Avendus report says the average price of a paid app in India is ~100. Browse through the app stores and you could find apps priced as high as ~600700 even. These apps come with prices that are simply converted to match their global prices. When an app is developed in one market, it cannot automatically be replicated in another. There can be legal constraints or even cultural considerations. Only at times when you know that the downloads would possibly not provide the volumes, that you may consider introducing the app as-is, without any tweaks, technical or monetary, says Sunil Chavan, ex-CEO, Metasys Software. That brings us to the rest of the app universe. The model finding widespread favour is the freemium one, where the customer downloads an ad-supported free app with limited features with the ability to upgrade to the full functionality ad-free app through a paid upgrade. Consider Instagram, the picture sharing app and its allied app universe. Other apps like Instacollage and Instaeffect
While businesses have long embraced and funded innovation, theyve not always used it effectively to deliver growth. However, this reality is changing. According to a PwC's 2013 Global Innovation Survey, the top global innovators plan to double the average expected growth rate over the next five years. And to achieve this, they have a well-defined strategy and approach towards innovation; focus more on collaboration and measure efforts more aggressively than average companies do. The result is breakthrough innovation and faster growth. According to the survey, collaboration has become the most important elements of successful innovation today. The top innovators plan to collaborate more with a more diverse set of stakeholders over the next three years. The survey also finds that the most aggressive innovators are more likely to use structured management approaches to innovation in order to speed the process. The innovative companies are investing in both formal accountability for innovation within individual business units and separate facilities in certain markets dedicated to making innovation happen. Both fast and disciplined, these approaches reward failure, and as a result encourage creativity. This structured approach tend to have a more rigorous selection process and fund fewer, highervalue projects so that time and resources are not wasted.