As publishers churn out ever more apps for smartphones, the challenge of monetizing all this additional inventory increases. While display advertising clearly has a place here, mobile does offer content owners the opportunity to leverage their users' attention in new ways, without porting to the small screen the clutter and poorly targeted garbage that renders so much of online advertising virtually invisible.
As has been true throughout the short history of mobile advertising, mobile content has itself been one of the chief advertisers on the mobile platform. From the days of ringtone subscription services in the mid-1990s, much of the available inventory in mobile display really was just pushing more content rather that other goods and service. Even many iAds the iPhone user happens upon are linking over to other apps.
But what if we took that direct marketing of other people's content out of the banner and put it in a curated marketplace, something like a back-of-book classified section that carries some of the imprimatur of the host publisher? That's pretty much the simple model at work in Blu Trumpet. Incubated at IAC in its new Hatch Labs, the company lets publishers add to their apps a wall of links to other recommended apps. The apps are chosen by an algorithm that uses past behavior to determine which of the available apps show the best conversion for the audience.
Because IAC is the company behind such familiar brands as College Humor, Daily Beast and Dictionary.com, the model was developed from the publisher's perspective, says Blu Trumpet CEO Nina Sodhi. "We talked to the IAC properties about the problems they saw in the mobile advertising space," she says. "One problem was ROI." Another was control: how content providers could determine more effectively how promotions worked within their app. The Blu Trumpet models uses an ad business model, cost per installation, and a design model that addresses both concerns.
Publishers can add to their app icons a More button that leads to the wall, which eliminates the on-screen real estate problems. The four or five items on the wall are all working on a CPI (cost per install) model that starts at 75 cents. But Sodhi says the company is already learning that the market is eager to pay $1 to $2. Sodhi says the conversions have been impressive. "Once a user looks at the wall in a session the click through rate is 10%, and then the install rate is 10% of that -- so we see 1% of impressions do an install." Publishers get 60% of the revenue.
Sodhi is looking for ways to move that 1% needle even more. One way would be to link to social media so users can layer onto the imprimatur of the publisher in these recommendations. The presentation of the apps also could be adjusted.
But what is even more interesting here is how both the classifieds-like format and the cost-per-engagement model could be broadened beyond the app. Why not a wall of e-books with samples, or a wall of movie and TV trailers? This could be a new area of sponsored editors' picks for other media with direct links to purchase and appropriate revenue share.
Mobile and tablet media have already demonstrated their abilities to sell content, so clearly the marketing models available to publishers should and could be broader here. Even more to the point, tablets especially are proving to be media consumption devices, which means content publishers should be looking for models that put them into the purchase funnel and leverage their audiences in much more lucrative ways than the traditional display ad models allowed.
Everything old is new again. Blu Trumpet is simply reviving for mobile the back-of-book marketplaces newspapers and magazines have used for decades. Now, however, both consumer and publisher are just a link away from fulfillment.