The second mobile cycle instantiated an extraordinary new set of commercial opportunities: apps in entirely new categories and featuring new content interaction models are now generating billions of dollars per year.
The mobile Top Grossing chart has thawed and diversified far beyond gaming, and the games that do reside there have adapted to the new commercial milieu in which they operate as either eSports or with recurring subscription packages. The Top 10 grossing chart is now comprised of apps that support the Three Ss: streaming, subscriptions, and social in-app advertising. The monetization strategies and tactics that support these interaction models are the result of a number of tectonic shifts that have taken place in mobile over the past few years.
This new opportunity space, to many, feels like a beginning: the start of a new commercial era for mobile. A blank playbook can be terrifying, and as the second mobile cycle has attracted marketing talent from outside of mobile, some companies are looking to traditional media strategies for app growth. For many companies, these marketing tactics have taken the form of pure-play brand development as a go-to-market and growth strategy. This is a reversion.
If the first mobile cycle is ignored, and the idiosyncrasies of mobile are ignored, and the nature of freemium is ignored, then it’s natural to look to pre-mobile marketing strategies for guidance on achieving commercial traction. But the growth lessons that were learned during the first mobile cycle are relevant — eminently so, painfully so — in this second mobile cycle. The marketers that are ignoring the lessons of the first mobile cycle are doing nothing but paying tuition with their marketing budgets.
Mobile apps are probably the most measurable, instrument-able, connected consumer products that humans have ever interacted with. This measurability and the immediate feedback cycle between the user and the developer (advertiser) means that direct response advertising is the shortest and most efficient path to the largest number of users.
A simple diagram for thinking about the progression from reach to monetization on mobile is:
This pyramid is perennial and hasn’t changed with the second mobile wave. The bottom of the pyramid here is important: it is growth. And while brand equity plays an important role for some apps in capturing value and even in capturing growth, brand marketing almost certainly isn’t and shouldn’t be the exclusive strategy used for capturing growth. Brand marketing can contribute across the entire value generation spectrum (all three triangles), but it cannot service the foundation — capturing growth — on its own. Direct response performance marketing is fundamental to capturing growth on mobile.
As I have written before, the opposite of performance marketing is not brand marketing: it is non-performance marketing. Brand marketing can be woven into a performance marketing strategy in a way that preserves the measurability and immediacy of mobile: in fact, the best marketing teams use brand building to make their direct response campaigns more efficient. But as uncomfortable as it might be for brand marketers to embrace, direct response advertising is best suited to do the heavy lifting in capturing growth on mobile.